Home / Companies / Air India sells 21 Dreamliner planes to repay loans

New Delhi: Air India has mopped up 7,000 crore by selling nine of its 21 Dreamliner planes to a Singaporean lessor, which it has taken back on lease from the company under a Sale and Lease Back (SLB) arrangement.

A major chunk of these funds will go into repayment of the bridge loan availed earlier for purchasing these Boeing 787-800s, airline sources said. Under as 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.

Air India has 131 aircraft in its fleet, consisting of Boeing, Airbus and ATR planes as well as CRJs. Of these, 21 are Boeing 787-800s. The flag carrier had sold and leased back 12 Dreamliners under a similar arrangement earlier as well.

Sources said that of the total proceeds, about 6,000 crore, will be used for repayment of the bridge loan taken against these planes at the time of acquisition. The remaining 1,000 crore will be utilised for other purposes.

The airline is saddled with a debt of about 40,000 crore that includes a long-term loan taken for aircraft purchase and a working capital loan. It has accumulated a loss of close to 30,000 crore.

The airline, however, is expected to report around 6 crore operating profit this fiscal.

These nine B 787-800s were inducted into the national carrier’s fleet between March 2014 and June this year. Air India had last month invited bids from domestic and international banks/financial institutions to sell these planes.

The airline had fixed a reserve price of not less than $123 million for the planes acquired in 2015 and $120 million for the aircraft inducted in the fleet during 2014.

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.

Surviving on a 30,000 crore bailout package from the parent, Government of India, Air India had reported a net loss of 5,547.47 crore in the last fiscal on the back of total revenues of 19,781 crore.

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