AI plane buy gets delayed

New Delhi: The government has asked cash-strapped Air India to defer the purchase of around six Boeing 777s.
The airline has been directed to do so to save on cash outgo and interest payout, sources in the civil aviation ministry said. However, an Air India spokesperson refused to comment.
Air India has inducted around 11 Boeing 777s and 15 Boeing 737-800s over the last two years for its international routes. But, these planes are not flying to their full capacity after the global recession led to a significant drop in passenger count.
This year Air India was expected to buy another seven Boeing 777s — four B777-extended range and three B777-long range aircraft. These would have been deployed on trans-continental routes.
The airline would need to pay Rs 8,165.44 crore for the new aircraft in this financial year. If it doesn’t hold back the purchase, it will have to borrow the money and pay interests, adding to its financial burden.
Sources also indicated that Air India would be selling aircraft that are more than 15-years-old to raise money. Analysts estimate that the airline can sell up to 25 such aircraft. But it would be difficult to find buyers or a good price for the planes, given the slump in the global aviation business, the analysts added.
In a separate meeting to decide on a turnaround strategy for the struggling carrier, Air India last night decided to set up special business units such as engineering, cargo handling and ground services and tap their commercial potential. Several cost-cutting strategies were also considered.
04/07/09 Jayanta Roy Chowdhury/The Telegraph

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Categories: NACIL Jul 2009