The Cabinet Committee on Economic Affairs (CCEA), on Thursday, approved the proposal by the Civil Aviation Ministry to allow Air India (AI) to go ahead with the sale of its five long-haul Boeing 777 aircraft to Etihad Airways.
The proposal is part of the national carrier’s turnaround plan. Air India had earlier finalised the deal with the Abu Dhabi-based carrier, which has also picked up 24 per cent stake in Jet Airways worth over Rs.2,000 crore.
There was no official word on the approval, but sources in the Cabinet informed that the deal had been given the final go ahead, and was estimated to be around $300-350 million.
However, Air India and Eithad have not revealed the size of the deal. The sale proceeds would be utilised by Air India to partly retire its huge debt and liabilities of over Rs.20,000 crore.
The two airlines had signed a Letter of Intent in October for an undisclosed amount, which was later approved by the national carrier’s board. The deliveries of these aircraft to Etihad are likely to start around March-April next. Etihad has already announced plans to deploy them on long-haul routes such as Abu Dhabi-Los Angeles from June next year.
Each of these planes would be re-fitted in a three-class configuration consistent with Etihad’s fleet. The purchase comes as Etihad finalises a new fleet order .