New Delhi: Air India Thursday declared its intent to sell three of its Boeing 777s for mopping up resources to stem its liabilities, barely four months after selling five of these planes to Gulf carrier Etihad Airways.
The airline offered three Boeing 777-200 Long Range airplanes, powered with GE 90-110 engines, for outright sale through competitive global bidding, Air India sources said a day after a meeting of its Board here.
The long-haul global routes flown by these aircraft would now be gradually replaced by Boeing 787 Dreamliners, which Air India is inducting at a steady pace. 13 of the 27 Dreamliners the airline has ordered have already joined the fleet.
The sale of five B-777s to Etihad in December last year was estimated to fetch over USD 335 million, which Air India plans to use to pay off its outstanding debt.
The three B-777s being sold now have a seat capacity of 238, including eight First Class and 35 Business Class seats.
While the commercial bids for these three five-year-old planes would be opened on May 13, the technical bids would be opened at a later date, the sources said.
As part of its turnaround plan, Air India is inducting the Dreamliners and going for a sale and leaseback arrangement to effect major savings. Under such an arrangement, the seller of an asset leases it back from the purchaser for a long-term and continues to use it.
The airline estimates it could raise about USD 840 million by selling seven Dreamliners and leasing them back. The money earned through the leaseback arrangement would be used to pay off the bridge loans taken against these aircraft.
Air India has mandated the leaseback arrangement with Investec Bank for four Dreamliners and three with Deutsche Bank. It is slated to get six more Dreamliners this year.
The sale of B-777s and leaseback of the B-787 Dreamliners are part of the financial restructuring and turnaround plan of the national carrier.
The airline, which has issued a tender for 12 Airbus A- 320s, would soon conclude the lease of five of these aircraft, the sources said. All of these planes would be in an all- economy configuration to be used on domestic routes.
Air India, which has an estimated debt and liabilities of over Rs 20,000 crore, has recorded significant improvements in its financial performance parameters.
It estimates a huge 44 percent slash in its operating losses in 2013-14 and an almost 20 percent growth in its operating revenue since the previous financial year.
First Published: Thursday, April 17, 2014, 19:04