Air India to sell three remaining Boeing B777 planes

Written by Rhik Kundu | Mumbai | Updated: Apr 30 2014, 20:33pm hrs
Air indiaAir India has struggled to break even on routes where Boeing B777s were deployed, mainly due to its high operating costs.
National carrier Air India has put its three remaining Boeing B777-200 LR airplanes for sale, about four months after selling five of these planes to Abu Dhabi-based Etihad Airways.

According to senior Air India officials, the airline has floated tender on the sale of these planes and expects to hear from prospective bidders by the middle of May.

Another Air India official told FE that some of the potential bidders for the B777s, this time around, could be leasing aviation companies and Etihad Airways which bought five of these planes from the airline last December.

The competitive global bidding for the three B777 close on May 12. The commercial bids for the aeroplanes are slated to open on May 13, while the price bids for the successful technical bidders are to be opened at a later date, said the airline's tender document for the sale of 3 B777s.

Air India had raised about $340 million (Rs 2100 crore) from the proceeds of the five B777 sale last year. The airline had raised about Rs 427 crore per aircraft though it had bought these planes at about Rs 1300 crore each.

The funds realized from the sale of 5 Boeing B777-200 aircraft, which was used in extinguishing the loans taken against these aircraft, had lead to the airline saving about $100 million per year towards interest and principal repayment as well as maintenance cost towards these aircraft, a senior official with the airline had earlier told FE.

According to the official, the airline struggled to break even on routes where B777s were deployed, mainly due to its high operating costs, which was the main reason for these aircraft to be put on the block.

Air India currently has a total debt of close to Rs 44, 000 crore, half of which is aircraft related. Out of the balance nearly Rs 18, 000 crore represent long term working capital loans.