Air India to gain $10-15 million from Boeing 787 sale & leaseback

New Delhi: The civil aviation ministry has defended Air India's plans to buy 27 Boeing 787 aircraft, popularly known as the Dreamliner, saying the debt-ridden airline will gain $10-15 million from the sale-andleaseback of each aircraft.
In a Cabinet note that will be circulated for an inter-ministerial consultation next week, the aviation ministry also said the compensation of a few hundred million dollars that the US-based aircraft manufacturer will pay for delay in delivery of these aircraft will make it a beneficial proposition for the financially-beleaguered airline.
"The list price for the Dreamliners (when the order was placed) was about $100 million, which will now fetch us a premium of $10-15 million per plane on a sale-and-leaseback arrangement as the price of the aircraft has appreciated in the past years," a senior government official told ET.
Under a sale-and-leaseback arrangement, an airline buys aircraft, sells it to a leasing company and leases back the planes.
This arrangement enables the airline to operate the aircraft, without the purchase debt in its books. After inter-ministerial discussions, the proposal will go to the Union Cabinet, which will take a call on whether to induct all 27 of Boeing 787s into Air India's fleet or only a part of it.
The national carrier, which has a total debt of nearly Rs 43,000 crore, has been repeatedly pressing the government on its need for 27 Dreamliners, to augment its fleet as part of its operational and financial turnaround plan.
13/03/12 Anindya Upadhyay/Economic Times

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Categories: Air India Mar 2012, Foreign Mar 2012