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AI ties up $155 mn towards pre-delivery payment for 3 B-777s

Published On : 13 Mar 2016

New Delhi, Mar 13 (PTI) Air India has tied up loans worth USD 155 million (over Rs 1,000 crore) to make pre-delivery payment for three Boeing 777 planes, amid the national carrier making efforts to expand and rejig its fleet with new aircraft.

The airline, which is making efforts to turn around its fortunes, is expected to start inducting the three new aircraft in early 2018.

Currently, the carrier has 15 Boeing 777s in its fleet -- 12 of them B777-300ERs and the rest B777-200LRs.

A senior official said the carrier will take loan to the tune of USD 155 million from Deutsche Bank at a "very competitive" interest rate towards making pre-delivery payment for three Boeing 777 planes.

The three aircraft are to be delivered to the carrier between January-March, 2018.

In December last year, Air India had sought proposals from banks and financial institutions for loan towards pre-delivery payment requirements for three Boeing 777-300 ER aircraft.

Under the terms of the agreement signed with Boeing Company, Air India has to pay 15 per cent of the gross cost of the aircraft as advance payment 24 months prior to delivery.

Earlier, the carrier had sought deferment of the delivery of the three Boeing 777-300ER planes, which are part of its 68-aircraft order placed with the US aircraft-maker in 2006.

It had placed orders with Boeing for 68 aircraft -- 27 Dreamliners, 15 B777-300ERs, eight B777-200LRs and 18 B-737-800s. The airline has so far taken delivery of 21 Dreamliners, 12 777-300ERs, eight B777-200LRs and 18 B-737-800s.

Following the downturn in the global aviation sector, the delivery of three B777-300ERs was postponed in 2008 as there was no "cancellation" clause in the original purchase agreement with Boeing Company.

Then in September 2015, Air India decided to take delivery of the remaining three planes as per the 2006 purchase agreement while rejecting a proposal, made by Boeing, to convert them into single-aisle planes.

The US aircraft-maker had offered that it would convert the order into that for 11 Boeing 737 MAX aircraft.

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