Air India to lease aircraft for money

Cash-strapped Air India, which is seeking a bailout package from the government, has decided to lease out seven of its aircraft to raise additional funds, airline sources said today.

“We have plans to put seven of our aircraft on lease and sub-lease. Of these, three are Boeing 777-200 (long range) and four Airbus 310-304 freighters,” the sources said. The company has floated global expressions of interest (EoIs) for the purpose, for which bids would be accepted till October 23, they said.

The four Airbus 310-304 were recently converted into freighters by the European consortium EADS, while the three Boeing-777-200 (LR) are passenger planes. The Boeings, manufactured in 2007, are to be leased for short and long durations, with a minimum period of 24 months.

The Airbus freighters are to be dry-leased for a minimum 18 months. Under dry lease, an aircraft is leased by a company without the crew, while a wet-leased plane would have the crew, engineering facilities as well as insurance cover borne by the lessor. Sources said a brand new Boeing 777, at present, could fetch the national carrier over $1 million per month as lease rental, whereas an A-310 could bring around $150,000 per month.

This would be a major source of revenue for Air India which is suffering an estimated loss of Rs 5,000 crore. The recent five-day stir by executive pilots of the flag carrier added to its losses. While the Boeings would be available for lease from the third quarter of next year, the Airbus planes are available with immediate effect.