Air India starts seeking financing for Boeing orders

Air India will have to pay about $400 million upfront in pre-delivery stage

BY A CORRESPONDENT
7th January 2006

Air India recently cleared a mega-agreement with Boeing for expanding its fleet at a cost of Rs 35,000 crore. The agreement is expected to be signed on January 11 2006.

Now, Air India, India's government-owned national flag-carrier airline has started seeking funds to make payments to Boeing in the pre-delivery stage. The aircraft purchase will include wide-bodied and narrow-bodied aircraft.

In short-term finances, Air-India now needs about $400 million, says a tender notice on the Air India website. Those willing to advance the loan will have to wait until January 9. The fleet expansion involves adding 68 aircraft to the Air India stable.

Air India required about $306 million for pre-delivery cash payments for 777-200LRs and 777-300ERs, which will commence with $250 million on the inking of the purchase agreement. This will be followed by $56 million in installments. The first Boeing 777 will be delivered in January 2007.

Air India adds that it needs $123 million for the 737-800s it is planning to order, starting with $113 million upon signing and another $10 million through May.