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Air India, owned by Tata Group, seeks a $200 million loan to buy Boeing 777 planes from a US leasing firm.
Air India looks to expand its fleet by adding new Boeing 777 planes.
Tata Group’s Air India is reportedly seeking a bank loan of $200 million (Rs 1726 crore) to purchase a fleet of Boeing 777 planes from a US-based aircraft leasing company, according to a report of Bloomberg News. The talks of the fund raise, the report added, have begun again after being put on hold post the tragic Air India crash in Ahmedabad.
AI Fleet Services IFSC Ltd. a GIFT City-registered subsidiary of Air India, is the borrower of the loan, said the Bloomberg report. The group, which operates two airline brands — the full-service carrier Air India and the low-cost alternative Air India Express — purchases and leases aircraft via this entity.
The purchase of aircraft takes place as Air India struggles to expand its fleet due to supply chain constraints impacting deliveries and its ability to get planes from the open market.
Air India is looking to purchase six Boeing 777 aircraft that it is currently operating, Bloomberg reported citing people familiar with the matter. According to the report, some of these planes are 11 to 13 years old and are primarily being used on India-US routes, as confirmed by data from flight tracking platform Flightradar24.
The move is part of the airline’s strategy to maintain a stable fleet while it awaits the delivery of new aircraft, Bloomberg noted. These purchases are aimed at bridging the gap until fresh deliveries begin.
People aware of the discussions told Bloomberg that the pricing for the proposed loan to fund the acquisition may be tied to the Secured Overnight Financing Rate (SOFR), a key global benchmark.
Air India was purchased by the Tata Group in 2022. The Tata Group acquired Air India from the Indian government after winning a bidding process.
The acquisition involved a share purchase agreement where Tata Sons paid Rs 18,000 crore for Air India. The transaction included Air India, Air India Express (low-cost carrier), and Air India SATS (ground handling and cargo services). Tata Sons will also have a 100% stake in Air India and Air India Express, and a 50% stake in Air India SATS.
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al…Read More
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al… Read More
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