Air India Board Approves Refinancing of $1.15 Billion Loan, Sets Plan for Fleet Renovation and Restructuring

Strategic Insights -

The Air India board of directors made significant decisions at its recent meeting, including refinancing a $1.15 billion loan taken to purchase Airbus A320 aircraft and approving the disposal of four aging Airbus 310 passenger aircraft. The carrier also plans to renovate its fleet by acquiring 30 acres of land for an aircraft maintenance, repair, and overhaul facility and leasing 22 aircraft to replace its aging fleet.

Key Takeaways:

  • The Air India board has asked ICICI Bank Ltd to refinance a $1.15 billion loan to purchase Airbus A320 aircraft, with a decision pending on the refinancing terms.
  • The board has approved the disposal of four Airbus 310 passenger aircraft, along with simulators and dry leasing 12 Airbus A320 and A330 aircraft to replace the aging fleet.
  • Air India Express, a low-cost service, will have a fleet of 21 aircraft, including leased ones, following the approval of the dry lease of four B737-800 aircraft.
  • The carrier plans to set up an aircraft maintenance, repair, and overhaul facility on 30 acres of land near Nagpur special economic zone.
  • A high-level committee, comprising government officials including the secretary of civil aviation, will finalize the final restructuring plan by next week, following a joint presentation by Deloitte and SBI Caps.
  • Air India's CEO had stated earlier that the carrier would operate 49 aircraft by the end of the year, as against the current fleet of 59 aircraft. However, the exact number of aircraft in operation has not been specified by the carrier.

Statistics:

  • $1.15 billion: The amount of the loan to be refinanced by ICICI Bank Ltd.
  • Rs.5,220 crore: The equivalent of the loan in Indian rupees.
  • $475 million: The value of the delivery financing of three Boeing 777-300 ER aircraft and one GE-90 spare engine with US Exim support.
  • 85%: The percentage of the mandate awarded to Citibank for delivery financing of the three Boeing 777-300 ER aircraft.
  • 15%: The percentage of the mandate awarded to Standard Chartered Bank for delivery financing of the three Boeing 777-300 ER aircraft.
  • 4: The number of Airbus 310 passenger aircraft being disposed of.
  • 10: The number of Airbus A320 aircraft to be leased.
  • 2: The number of Airbus A330 aircraft to be leased.
  • 21: The number of aircraft that will comprise Air India Express's fleet.
  • 4: The number of B737-800 aircraft to be leased.
  • 30: The number of acres of land to be acquired for the aircraft maintenance, repair, and overhaul facility.

Sources:

  • Domain-b.com
  • Contify.com