Air India Ltd’s plan to lease five Boeing Co. 777 aircraft of Jet Airways (India) Ltd has hit a roadblock as the biggest lender to the grounded airline has still to respond to the offer.
“We have submitted our plans (to lease the aircraft) to State Bank of India (SBI) and we are yet to hear from them," said a senior Air India official, requesting anonymity.
A consortium of lenders of the airline led by SBI took control of Jet Airways, in March, after the airline defaulted on interest payments in December and eventually shut operations amid a cash crunch and large debt. The consortium of banks has also thrown open a bidding contest for a new investor that is expected to be completed in the June quarter.
Air India chairman Ashwani Lohani had in April expressed interest to lease the five Boeing 777 planes from Jet Airways and deploy them on key international routes. A spokesman for SBI did not immediately respond to emailed queries from Mint. Meanwhile, the state-run carrier, which has a portion of its fleet grounded due to ongoing maintenance and repair work as well as an engine overhaul, hopes to get at least a few of those planes in service in the coming months. “We are spending at least ₹7-10 crore every day on grounded aircraft," said the official cited above adding that the airline has been funding the maintenance work from its internal accruals.
Air India, which has a fleet of about 123 aircraft, has offered three of the newer generation CFM Leap 1-A engines that power its Airbus A320neo fleet as collateral, for purchasing five new CFM 56-5B engines, the airline said in a recent tender. This move from the national carrier comes after it had exhausted sovereign guarantee to raise more loans, and had to come up with other means to raise $45 million to finance the purchase of the five CFM 56-5B engines for its Airbus A320 aircraft.