Air India to buy 4 Boeing Dreamliners, use $450mn bridge loan to fund purchase

With a view to expanding international operations, Air India will add four Dreamliner aircraft to its fleet. Senior executives at the airline said it would use a $450 million bridge loan (Rs 2,900 crore) to part fund the purchase. The mandate for sourcing the loan has been given to Mashreque Bank and NABARD. The expansion of the Dreamliner fleet will help the airline operate on long haul routes.

“The acquisition of these four Dreamliners was a part of the original acquisition plan of 68 aircraft from Boeing. With these, the fleet of 787s will go up to 27,” a senior official of Air India said.

The first Dreamliner aircraft was inducted into the fleet in 2012 and the last one will come in October this year. The airline could opt for either the sale and lease back model or the direct finance model. Air India chairman, Ashwani Lohani, has observed aircraft should be purchased rather than sold and leased back.

“Both direct purchase and sale and lease back model (SLB) have their advantages and disadvantages and we will need to consider these,” the official mentioned above, said.

The Dreamliners form the backbone of the Air India’s fleet and will come in handy when the airline flies on the direct routes like Delhi- San Fransisco, Delhi – Madrid or the recently launched Delhi – Copenhagen.

Currently, the average daily utilisation of the 787 is between 13 to 14 hours a day. Apart from the Dreamliners, Air India will also add a Boeing 777 wide body aircraft by January 2018. Currently, Air India is the largest operator of non stop flights to United States, United Kingdom and other European destinations.

Almost 75% of the capacity of Air India is deployed on the international sector. The airline is in the process of inducting 14 A320 narrow body aircraft from Alafco, a Kuwait -based aircraft leasing company which will mostly replace the old narrow body aircraft deployed in the domestic sector.

Air India