Air India hopes to conclude deals on 14 Dreamliners
With the leaseback of the first lot of seven Dreamliners finalised, Air India has now issued tenders for seven more for which it wants to conclude the process by March, taking the total to 14, the sources said.
Mumbai: Air India hopes to conclude the sale and lease back process for 14 of its Boeing 787 Dreamliner aircraft by March this year, official sources said today.
"We have already issued tenders for seven more Boeing 787 planes which we want to conclude by March this year," the sources said in Mumbai.
Two of these Boeing 787s have already been sold to global banking firm Investec and leased back, while two more would be sold this month to the same bank for leaseback, the sources said, adding "we have three more coming up next month which would be sold to and leased back from Deutsche Bank".
With the leaseback of the first lot of seven Dreamliners finalised, Air India has now issued tenders for seven more for which it wants to conclude the process by March, taking the total to 14, they said.
Sale and leaseback is a financial transaction where one sells an asset and leases it back for a long term, enabling the seller to continue to be able to use the asset without actually owning it.
The sources said leaseback was aimed at getting Air India to almost do away with the loans taken for buying these planes from its books. Lease rentals are generally up to one percent of the aircraft cost. The price of one Boeing 787 typically ranges between $105-110 million as per list prices.
They said that Air India was "well on track" of meeting all the parameters laid down for receiving Rs 30,000 crore bailout packet from the government.
"We are meeting most of the parameters as laid down in our turnaround plan and financial restructuring plan. However, there are some factors like crude prices and currency fluctuation which are beyond our control," the sources said.
The government had in 2012 approved bailout of Rs 30,000 crore for the national carrier by 2020-21. It, however, attached several riders to cut costs. Besides sale and leaseback of aircraft, these riders also included targets like achieving a specific load factor and on-time performance over a period of time.
As per the government's directives, the national carrier has withdrawn from a number of domestic and international routes in the last two years as they were not found operationally "profitable".
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"We plan to operate the first international flight to Frankfurt, from 15 October. This will be followed by other operations to Europe and Japan," a senior Air India official said.
The Boeing 787 Dreamliner, the latest acquisition of Air India, is likely to shore up the fortune of India's national carrier as passengers are giving big thumbs up after travelling in the next generation flying machine.