AI to refinance USD 1.15 billion debt

The loan was taken to buy 21 new A-320 aircraft from European aerospace giant Airbus. "Air India proposes to refinance the existing rupee loan equivalent of USD 1,150 million obtained from consortium of Indian banks led by IDBI," Civil Aviation Minister Praful Patel said in a written reply to the Lok Sabha.

In reply to another query, Patel said that Air India has been in discussion with Boeing for compensation on account of delay in delivery of B-787 aircraft. He added that Boeing has cited several reasons for slower production rate than originally planned by the American firm.

"The reasons given by Boeing for delay in delivery of B-787 aircraft includes challenges in completing assembly of the first aircraft, slower production rate than originally planned and mechanics strike," Patel said.

He, however, did not give further details about the compensation package which Air India proposes to seek. News reports said earlier that the loss-making national carrier is planning to seek USD 840 million as compensation from US aircraft maker Boeing for the inordinate delay in the delivery of Boeing 787 Dreamliners.

Air India had ordered 27 Dreamliners in 2007 as part of its order for 111 aircraft to replace is aging fleet and leased planes. However, Boeing failed to supply those planes by the scheduled time, which was to begin from September 2008.

The Company has now rescheduled the delivery to second quarter of 2011.

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