AI to get USD 475 mn loan from Standard Chartered for planes

The two companies signed the agreement late last month on the terms and conditions, an airline official said. The National Aviation Company of India, the holding company of Air India, had last month invited Requests for Proposals (RFP) from domestic and international financial institutions to raise USD 475 million for acquiring three Boeing 777-300 Extended Range planes.

"NACIL has now sought a Letter of Comfort from the Government, which owns Air India, to enable it approach the US Exim Bank for converting the bridge loans (short-term)", which it has taken earlier for aircraft acquisition, "into long term loans," the official said.

Air India Board had last week approved bridge financing for the three aircraft. The entire effort of the national carrier now is aimed at softening the financial impact of its fleet acquisition programme on its overall cost structure.

While the airline is estimated to have paid Rs 12,000 crore to induct new planes last year, the burden this financial year is expected to go up to a whopping Rs 22,000 crore.
In 2006, Air India had placed orders for a total of 68 aircraft —- 18 B 737-800 planes, 27 Dreamliners (B787-800) and another 23 B 777 aircraft. Of the 23 Boeing 777s, 15 are B 777-300 ER planes and eight Boeing 777-200-LR aircraft.

The airline has already taken delivery of 18 B 737- 800s and eight B 777-200 LRs. Of the 15 B 777-300 ER aircraft, it has received 10 planes while five more are to be delivered over the next 15 months.