Air India loan rejig to cut cost

Mumbai: Air India is planning to trim its interest costs on the loans it has raised to pay for the planes it has ordered to replace its ageing fleet.
The state-owned airline, which has refinanced its loans, is mulling the option of switching from a floating rate to a fixed rate of interest.
However, that will happen only when the London Inter Bank Offered Rate (Libor) — a key rate-setting benchmark for international loans — eases to a level between 4.25 and 4.5 per cent. At present, the six-month Libor is ruling at 4.86 per cent.
The airline, which has just reported a loss of Rs 447.93 crore for the year ended March 2007, has placed orders for 68 Boeings over the next 17 years. Fifteen planes have already been delivered.
The planes that have been ordered include 18 Boeing 737s for Air India Express, eight Boeing 777-200 LR, 15 Boeing 777-300 ER for non-stop long-haul operations and 27 Boeing 787 Dreamliners for which deliveries start next year.
The company has estimated the total acquisition cost at Rs 35,000 crore.
The company has so far paid about Rs 7,100 crore to Boeing towards acquisition of B-777, B-737-800, and as pre-delivery payment for 787 aircraft acquisition programme.
28/11/07 Anirudh Laskar/The Telegraph

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