Air India puts five B777s on block, eyes $450 m from sale
Mumbai: After failing to find any lessor for its five Boeing 777s, the debt-laden Air India is now planning an outright sale of these aircraft to raise up to USD 450 million (about Rs 2,500 crore), airline sources said.
The state-run airline will soon appoint a consultant to help it find a suitable buyer besides taking the assistance from Boeing on the issue, they said. The move is to trim over Rs 68,000-crore debt, they added.
"These are surplus aircraft after the induction of the latest Dreamliners in our fleet which we have decided to dispose of," Air India sources told PTI today.
Earlier, the carrier had sought to 'sale and lease back' the fuel-guzzling five Boeing 777-200 LR planes, which are of 2007 and 2009 make.
However, despite repeated attempts, Air India did not find any taker for them, eventually forcing to put them on the block.
"Currently, the price for these aircraft hovers around USD 85-90 million per unit," they said, adding the proceeds from the outright sales would be utilised to phase out loan taken for these aircraft. These planes were part-funded by the US Exim Bank.
The airline will soon appoint a consultant to facilitate the sales. In addition "we have also requested Boeing to remark these planes," sources added.
In 2005, Air India had placed orders for 68 aircraft with the US aircraft-maker Boeing consisting of 18 B737-800s, 27 Dreamliners and another 23 B777s, apart from 43 from the European plane-maker Airbus.
Of the 23 777s, 15 are B777-300 ERs and eight are B777-200-LRs.
Air India has already taken delivery of 18 737-800s and eight B777-200 LRs, besides 12 B-777-300 ERs.
The airline has also received three Dreamliners out of the 27 on order so far and four more are expected to join its fleet by the fiscal end.
The five B777s, which the carrier has now put up for sale, belong to the same order. The eight 777-200 LRs, of which Air India plans to sell five, are 235-seaters against the industry practice of 290-300 seats.
The idea behind this configuration was to operate them on ultra long-haul routes like Chicago, New York, Toronto etc, on premium fares, but that did not materialise.
This forced the airline to deploy them on medium haul sectors such as Hong Kong, Shanghai and London, rendering the aircraft operations economically unviable.
The aircraft, known as the Worldliner in the aviation parlance, or the one which can pair any two cities on the extremes, can fetch revenue only when operated on ultra-long routes.
In January, Air India had decided to do away with these aircraft by leasing them as soon as it got a firm indication about the delivery of the Dreamliners.
The first dry-lease tender was floated on January 2 this year but having failed to get a buyer it re-issued bids several times before finally scrapping the plan and deciding to go for an upright sale.