Air India gets $200-million loan for purchase of three Dreamliners
14 April 2014 3:02 PM IST
Bank of India has given a stand-alone loan of $200 million for three Dreamliners
Bank of India has given a stand-alone loan of $200 million for three of these airplanes.
Photo Courtesy: PTI
Mumbai: 'Indian banks have started evincing interest in financing aircraft purchase, with Bank of India (BOI) extending a loan of $200 million to Air India to finance the acquisition of three Dreamliners,’ according to official sources.
The national carrier would use the amount to acquire these Boeing 787s before offering them to leasing companies for sale and leaseback arrangement, under which one sells an asset and leases it back, thereby continuing to use the asset but no longer owning it.
BOI has also given a stand-alone loan of $200 million for three of these airplanes, the sources said, adding that BoI and the State Bank of India have earlier taken a share of financing aircraft purchase.The airline plans to raise $500 million in this financial year through bridge loans to finance five Dreamliners.
Air India has also received a credit of $288 million from Standard and Chartered Bank to pay off the bills for the fuel its planes pick abroad, besides purchase of simulators and spare parts, they said. Almost 70 per cent of an airline's costs are dollar-related, since most of the acquisition is carried out from foreign suppliers.
Air India, which has issued a tender for 12 Airbus A-320s, would soon conclude the lease of five of these aircraft, which would be in an all-economy configuration.
The national carrier's capacity is expected to grow by 9.2 per cent with the addition of six more Dreamliners to the fleet. With an enhanced fleet strength, Air India is targeting a domestic load factor of 76.6 per cent in 2014-15 and 74 per cent on the international front. It estimates that the number of passengers is expected to go up by over five per cent.
In the current financial year, Air India has projected a passenger revenue of Rs. 16,400 crore, a growth of 14.5 per cent over Rs. 14,300 crore in 2013-14. It expects an operating revenue of Rs. 21,300 crore compared to Rs. 19,200 crore in 2013-14.
The national carrier would use the amount to acquire these Boeing 787s before offering them to leasing companies for sale and leaseback arrangement, under which one sells an asset and leases it back, thereby continuing to use the asset but no longer owning it.
BOI has also given a stand-alone loan of $200 million for three of these airplanes, the sources said, adding that BoI and the State Bank of India have earlier taken a share of financing aircraft purchase.The airline plans to raise $500 million in this financial year through bridge loans to finance five Dreamliners.
Air India has also received a credit of $288 million from Standard and Chartered Bank to pay off the bills for the fuel its planes pick abroad, besides purchase of simulators and spare parts, they said. Almost 70 per cent of an airline's costs are dollar-related, since most of the acquisition is carried out from foreign suppliers.
Air India, which has issued a tender for 12 Airbus A-320s, would soon conclude the lease of five of these aircraft, which would be in an all-economy configuration.
The national carrier's capacity is expected to grow by 9.2 per cent with the addition of six more Dreamliners to the fleet. With an enhanced fleet strength, Air India is targeting a domestic load factor of 76.6 per cent in 2014-15 and 74 per cent on the international front. It estimates that the number of passengers is expected to go up by over five per cent.
In the current financial year, Air India has projected a passenger revenue of Rs. 16,400 crore, a growth of 14.5 per cent over Rs. 14,300 crore in 2013-14. It expects an operating revenue of Rs. 21,300 crore compared to Rs. 19,200 crore in 2013-14.
( Source : PTI )
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