Air India to lease out planes after Dreamliner induction
The cash-strapped national carrier has plans to sell and lease back Dreamliners to cut its debt, a source told Reporters on Monday.
Air India may lease out "excess capacity" of two Boeing 747-400 aircraft and some 777-200 LR aircraft folloiwng the induction of Dreamliners, Air India said in a statement.
A consortium of lenders to Air India has broadly approved its financial restructuring plan which includes extension of the tenure of about $4 billion of working capital loans as well as converting some of the loans into equity.
The consortium has 26 banks and is led by state-run State Bank of India (SBI.NS_2">SBI.NS), the largest in the country. IDBI (IDBI.NS) and Bank of Baroda (BOB.NS) are others in the consortium with exposure to the loss-making carrier.
Air India, which has posted a loss before tax of 70 billion rupees for the year ended March, said the debt recast plan would help it save 10 billion rupees per annum by way of interest cost.
"As per the plan approved for the company by the committee of officers the company is trying to achieve an overall load factor of 73 percent in the near future," the firm said.
India's airlines are struggling with surging oil prices, high sales tax on jet fuel and below-the-belt pricing due to increased competition, leading to massive losses.
According to the Centre for Asia Pacific Aviation, Indian airlines are on course to post record losses of more than $2.5 billion for the year ending March 2012, with Air India likely to account for more than half of this.