National carrier Air India has raised a bridge loan of $410 million (R2,426 crore) from Deutsche Bank and Standard Chartered Bank to finance the purchase of four Boeing 787 Dreamliner aircraft, a senior company executive told FE.

At the end of the December quarter, Air India had a total debt of R44,000 crore. Of this, around R22,000 crore was related to the purchase of aircraft, while another R18,000 crore was towards working capital loans.

Of the 27 Boeing 787 Dreamliner aircraft Air India had ordered in 2007, the carrier has inducted 14 so far and expects deliveries of two more planes in June and July. Another two are scheduled for delivery before the year end.

The airline will use these aircraft to launch flights to new destinations like Moscow, Rome and Milan. This is in addition to the five Airbus A320 planes it has leased from a Hong Kong-based firm to combat aggressive competition on domestic routes with the imminent arrival of new entrants like AirAsia and a new airline to be started by Tata Sons, along with Singapore Airlines.

?The plan was to get 19 A320 aircraft on lease, which was to be used partly for the replacement of old fleet and partly for launching new flights on domestic routes,? the Air India executive said. ?Since we have been able to lease five planes already, we will soon float another tender for the remaining 14 planes,? the Air India official said. Air India plans to operate these planes, all of them less than six years old, in an all-economy configuration with 188 seats.

?We have a foreign debt of about $5 billion, of which we have already repaid $2.5 billion since 2007,? said the executive. ?At present, we are paying $450 million a year towards the repayment of the foreign loans. We expect to repay the remaining amount in the next five to six years,? he added.

Other airlines in India are also looking to borrow from overseas markets. Jet Airways is looking to secure a credit line of $150 million by way of external commercial borrowings by the end of June, Ravichandran Narayan, the vice-president of finance at Jet Airways, had said during an analyst call after its March quarter earnings. Jet?s consolidated debt stood at $1.77 billion (around R10,471 crore) as on March 31.