Air India to raise $250 million by putting two Dreamliners on sale

Air India. Photo: Reuters
State-owned carrier Air India has put on sale two more Dreamliners (Boeing 787-800) to raise $250 million (nearly Rs 1,700 crore) for the repayment of short-term loan availed earlier for purchasing these planes.

The airline would also lease back these two Boeing 787-800s under an operating lease for a period of up to 12 years with a three-year extension option, the airline said in its Invitation of Offers document.

These two aircraft were delivered to Air India between November last year and January this year.

Under a Sale and Lease Back (SLB) arrangement, the seller of an asset leases it back from the purchaser for a long-term period and continues to use it without actually owning it.

The airline has fixed a reserve purchase price at $125 million (Rs 836 crore) for each aircraft.

Currently, the airline has 23 Dreamliners in its fleet.

The airline has already sold and leased back the remaining 21 Dreamliners under the SLB arrangement.

As part of its fleet expansion plan, the national carrier had in 2006 placed orders with Boeing for 68 aircraft -- 27 Dreamliners, 15 B777-300ERs, eight B777-200LRs and 18 B-737-800s.

The sale and lease back transaction will be supported by the Government of India guarantee in favour of the bank/ institution/lessor, according to the document.

The guarantee will cover the lease rental obligation during the lease term and may include certain breakage costs and re-delivery conditions, it added.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel