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Air India ties up financing for 12 Boeing 787 Dreamliners

PTI | Last Updated: Tuesday, October 15, 2013 - 20:09

New Delhi: Air India has tied up financing for 12 of the 27 Dreamliners it has ordered from Boeing and decided to have a long-term agreement with its American engine manufacturer GE for overhaul and repair of GEnX engines powering these aircraft.

A meeting of the Air India Board here was Tuesday informed that bridge financing for the 12 Boeing 787 Dreamliners has been tied up with Deutsche Bank and Investec Bank, airline sources said. The list price of one Boeing 787-8 is about USD 212 million.

Regarding the 'on point agreement' with GE Aviation that produces the GEnX engines, the sources said the 12-year accord, which was approved by the Board today, would not only be for repairs and overhaul of these sensitive engines, but the contract would also take care of exigencies like foreign object damage (FOD).

While for the first three years, the engines would be flown to the US or Malaysia for repairs, the work would then onwards be done at the new Maintenance, Repair and Overhaul (MRO) centre coming up at Nagpur at a cost of Rs 400 crore.

The GEnX engines would require on an average two shop visits in 12 years, the sources said, adding each shop visit could cost around USD 5-6 million.

This long term agreement would help Air India save about Rs 200-250 crore over 12 years and "in the worst case scenario Rs 102 crore," the officials said.

The Board also approved the appointment of KPMG as the airline's internal auditor to benchmark its practices to the global ones, particularly in terms of the jet fuel use, inventory management, revenue management and catering.

First Published: Tuesday, October 15, 2013 - 20:09
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