Air India Plans to Refinance Loan, Rejig Fleet

Mumbai: National carrier Air India is planning to refinance debt worth 50 billion rupees ($1.12 billion) with either a cheaper dollar-denominated loan or a rupee bond, as it aims to save interest costs to steer itself toward profitability, a senior executive said Wednesday.
"The decision to refinance was taken in the last board meeting. A tender for refinancing will be put out by the end of May," said the executive, who didn't want to be identified.
The loan being refinanced was taken in 2009 to finance the purchase of 21 Airbus planes, he said.
Air India, which is wholly owned by the federal government, has suffered losses since the 2007-08 financial year. Its merger with Indian Airlines, the former state-run domestic carrier, has failed to yield synergies that would have left it in the black.
The airline, like others in the industry, was also hit by the decline in air traffic in 2008 and early 2009, while being saddled with a $15 billion order for 111 aircraft placed by Indian Airlines with Boeing Co. and Airbus in 2005.
05/05/10 Anirban Chowdhury/Wall Street Journal

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Categories: NACIL May 2010