Air India seeks $200M loan to buy Boeing 777 planes
What's the story
Air India is looking to secure a bank loan of around $200 million through its GIFT City-registered subsidiary, AI Fleet Services IFSC Ltd. The funds will be used to buy a fleet of Boeing 777 aircraft from a US-based leasing company. This strategic move comes as part of Air India's efforts to strengthen its fleet amid ongoing supply chain challenges and delivery delays.
Negotiation update
Fund-raising talks resumed after being halted
The talks for this fund-raising initiative started earlier this year but were temporarily halted after the crash of an Air India Boeing 787 Dreamliner in Ahmedabad last month. However, these discussions have now resumed with the details of the deal still subject to change. The loan's pricing could be tied to the benchmark Secured Overnight Financing Rate, meaning it won't be fixed.
Expansion strategy
Air India has ordered 570 new aircraft since 2022
Since the Tata Group took over Air India in January 2022, the airline has placed orders for 570 new aircraft with Airbus and Boeing. The company could also speed up deliveries of narrow-body Boeing 737 Max jets by accepting 50 planes originally intended for Chinese carriers. These strategies are part of a larger plan to expand and modernize Air India's fleet.
Operational details
Air India operates 6 Boeing 777 aircraft
Air India currently operates six Boeing 777 aircraft, which it intends to buy through this loan. These planes are between 11 and 13 years old and mainly serve the airline's India-US routes. The purchase of these aircraft is aimed at ensuring Air India has enough planes for operations until new aircraft deliveries start.