Dubai: The purchase of five Air India Boeing 777 airplanes by Etihad Airways will help the troubled Indian airline meet financial requirements including paying off aircraft loans.
Abu Dhabi’s Etihad is purchasing five Boeing 777-200 long range aircraft at an estimated cost of $336.6 million (Dh1.23 billion) with title of the planes to be transferred by April, official sources said on Sunday.
The ailing carrier, wholly owned by the Indian government, decided to sell off the planes after other options including leasing, re-configuring or deployment on alternative routes was deemed unfeasible.
In another move to balance its books, Air India has projected it can raise around $840 million by selling of its seven Boeing 787-8 Dreamliners and lease them back.
Sources said the airline intends to use the capital raised by the sell-off to pay the bridge loans taken against the aircraft.
Air India has a leaseback arrangement with Investec bank for four 787-8s and a further three with Deutsche Bank.
Sales of the 777s and 787s is expected to generate enough capital to repay the aircraft loans and clear debts,
Air India’s debt and liabilities is estimated at more than 200 billion Indian rupees (Dh11.8 billion).
— with input from agencies