AI turns to banks, FIs to finance Dreamliner buy

Air India is looking at banks and financial institutions based in India and abroad to raise $110 million for making 10 per cent advance payment to Boeing for six Dreamliner planes, which are to be acquired in 2016-17.

The ‘Interest of Offer’ was issued on Friday for “pre-delivery payments” for financing the advance payment of six B787-8 (Dreamliners) from the US-based aircraft manufacturer.
The listed price of a Boeing 787-8 aircraft was $218.3 million in 2014. For the six Dreamliners, Air India is looking at an advance payment of around $110 million.

Air India already has 21 Dreamliners and it plans to get the remaining six from the order of 27 before March 2017. In 2006, the national carrier had ordered 68 aircraft from Boeing — 27 Dreamliners and 41 B-777s and B-737-800s.

“As per the terms of the agreement with Boeing, Air India is required to pay 10 per cent of the gross cost of the aircraft as advance payment 12 months prior to delivery,” the document said.

The interest rate could be on floating as well as fixed interest rates or both, it said. It will be repaid from aircraft delivery financing.

In its proposals, the banks and financial institutions will have to give details of financing cost, including interest, upfront fee, annual fee and charges, any other associated fees and others.

“Air India will require the right to make currency and interest swaps and prepay the facility without penalty,” the document said adding that the last day for submitting the proposals is June 8.

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