New Delhi: Cash-strapped national carrier Air India has deferred the delivery of three long-haul Boeing 777 aircraft from next year to beyond 2012 as it tries to reduce expenses and streamline its fleet of at least 150 aircraft, two airline officials said on condition of anonymity.
It is also in talks with the Boeing Co. to convert the order for the three aircraft, valued at around $450 million (around Rs2,000 crore), into one for narrow body Boeing 737s, which it uses to fly to West Asia and South-East Asia, one official said.
Air India, run by National Aviation Co. of India Ltd, will, however, induct three Boeing 777s this year. It is seeking a so-called “bridge loan” of $450 million from Standard Chartered Plc as a stop-gap arrangement to purchase these aircraft, until it receives an already approved loan from the Export-Import Bank of India, the officials said.
The deferred aircraft were part of a $11 billion order for 111 aircraft placed in 2006.
Air India already has a wide-body fleet of 35 aircraft, including 17 Boeing 777s owned by the carrier and four leased. It is also expecting the delivery of over two dozen newly launched Boeing 787 aircraft from next year.
Indian airlines, facing a paucity of funds, are leasing out or deferring the delivery of long-haul aircraft as they turn their focus on the shorter West Asian and South-East Asian routes that offer better returns compared with US and European destinations.
Air India is in talks with Thai Airways International Public Co. Ltd and some other carriers to lease out half a dozen Boeing 777s, the two officials quoted above said. The decision is likely by June.
London-based aviation analyst Saj Ahmad said deferring the delivery of Boeing 777s depends on Air India’s network plans.
“Deferring 777s, or any other jet, depends on traffic forecast, forward bookings, etc.—no real way of saying it’s “good” when Boeing is increasing 777 rates next year to customers,” he said in an email.
“Indian carriers have failed (in) their procurement of the 777 and every other jet they ordered during the boom years. Mismanaged airlines, too ambitious growth, reliance on high yield traffic and ignoring the macroeconomic pressures has seen them offload, lease out jets and decrease their operational footprint,” Ahmad said.