As part of the financial restructuring and turnaround plan, national carrier Air India will use the funds generated from the sale of five Boeing 777s to Abu Dhabi based Etihad Airways and that from carrying out sale-leaseback of its Dreamliners 787s as proceeds to pay off its loans.
The sale of five Boeing 777-200 Long Range aircraft to Abu Dhabi-based Etihad Airways is estimated to fetch $336.5 million for the ailing national carrier. They would start operating under Etihad flag from April.
Air India said it could raise about $840 million by way of sale of its seven B-787s Dreamliner planes and lease them back. It intends to pay off the bridge loans taken against these aircraft by using the funds, officials in the Civil Aviation Ministry said.
Air India has mandated the leaseback arrangement with Investec Bank for four Dreamliners and three with Deutsche Bank. It is scheduled to get six more Dreamliners this year.
“All proceeds received would be used to repay the aircraft loans, while the surplus funds would be used to clear debts and meet the airline's working capital needs,” officials said. Air India's huge debt and liabilities are estimated at over Rs. 20,000 crore.
The sale of the Boeing 777 aircraft to Etihad was approved by the Cabinet Committee on Economic Affairs in November last year. Etihad plans to use these five aircraft to launch non-stop flights between Abu Dhabi and Los Angeles from June.
The airline had placed orders for 68 aircrafts with Boeing in January, 2006, including 27 Dreamliners, 41 B-777s and B-737-800s. Apart from this, it had also booked 43 planes from Airbus which have been inducted into its fleet.