National carrier Air India will raise about $340 million (Rs 2,100 crore) by selling five Boeing 777-200 to Etihad, an airline official told FE on Thursday.
The proceeds from the sale of the aircraft, commonly referred to as 777s, will be used to pay off aircraft loans and allow the airline to save $100 million per year towards interest and maintenance costs.
“The funds realised from the sale of five Boeing 777-200 aircraft will be used to extinguish loans taken against these aircraft and to that extent we anticipate a saving of $100 million per year towards interest and principal repayment as well as maintenance cost towards these aircraft.” a senior Air India official had earlier told FE.
The airline currently has a total debt of close to Rs 44,000 crore, half of which is aircraft related. The balance, Rs 18, 000 crore, represents long-term working capital loans.
The West Asian airline, Etihad, which plans to use the aircraft to launch direct flights between between Abu Dhabi and Los Angeles from June, is expected to induct the aircraft into its fleet by April this year.
The Cabinet Committee on Economic Affairs had last November cleared the sale of the Boeing 777 aircraft to Etihad.
According to airline officials, Air India struggled to break even on routes where these aircraft were deployed, mainly due to its high-operating costs — main reason for these planes to be put on the block.
However, the airline will be selling five of its 777s for a mere Rs 420 crore per aircraft against about Rs 1,400 crore each it spent on purchasing the aircraft. It paid about Rs 11,200 crore to buy eight 777s after a 2004 deal. It plans to line up the remaining three Boeing 777-200 LRs in its fleet for sale, officials said.
AI, JetLite & SpiceJet suffer operating losses in 2012-13
Air India, JetLite and SpiceJet suffered operating losses of Rs 3,159.6 crore, Rs 246.8 crore and Rs 279.8 crore, respectively, in 2012-13. Jet Airways, IndiGo and GoAir achieved operating profits of Rs 122.6 crore, Rs 795.8 crore and Rs