Air India is seeking a bank loan of about $200 million to purchase a fleet of Boeing 777 planes from a US-based aircraft leasing company, according to people familiar with the matter.
AI Fleet Services IFSC Ltd., a GIFT City-registered subsidiary of Air India, is the borrower of the loan, the people said, who asked not to be identified discussing private matters. The group, which operates two airline brands — the full-service carrier Air India and the low-cost alternative Air India Express — purchases and leases aircraft via this entity.
The talks for the fund-raising, which started earlier this year, had slowed after the crash of Air India’s Boeing 787 Dreamliner in Ahmedabad last month, the people said, but discussions have since revived and the deal’s details could still change.
The purchase of aircraft takes place as Air India struggles to expand its fleet due to supply chain constraints impacting deliveries and its ability to get planes from the open market.
Since Tata Group took over Air India in January 2022, the airline has placed orders for 570 new aircraft with Airbus and Boeing in over three years. The company could expedite the deliveries of narrow body Boeing 737 Max jets by taking possession of 50 planes that were meant mainly for Chinese carriers.
A representative for Air India declined to comment.
Air India is currently operating the six Boeing 777 aircraft that it is seeking to buy, said some of the people. Some of the planes are between 11 and 13 years old and are mainly for the airline’s India-US routes, according to flight tracking website Flightradar24.
Such purchases are to ensure that Air India has enough planes to operate with until the delivery of new aircraft takes place, the people said. The pricing of the proposed loan could be linked to the benchmark Secured Overnight Financing Rate, they added.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
