Air India to raise Rs 700-crore bank loan to pay for 6 Dreamliners

Air India has to pay Boeing 10% of the gross cost of the aircraft as advance payment 12 months prior to delivery

National carrier Air India plans to raise $110 million (around Rs 700 crore) from banks and financial institutions to partly fund its acquisition of six Boeing Dreamliners, which are to be delivered to the airline in the next fiscal.

The state-owned carrier currently has 21 Boeing 787-800 (Dreamliner) planes in its fleet.

"Air India is pleased to invite your bank/financial institution to submit a fully underwritten offer for Pre-Delivery Payment requirements (PDP) for six B787-8 aircraft," says the tender document uploaded on the airline's website yesterday.

As per the terms of agreement signed with Boeing Company, Air India has to pay 10% of the gross cost of the aircraft as advance payment 12 months prior to delivery, the tender document said.

The six aircraft are to be delivered to the carrier between April 2016 and March 2017.

At present, the list price of a Boeing 787-8 is about Rs 1,400 crore.

The loan would be repaid from aircraft delivery financing process, it said.

As part of its fleet expansion plan, the national carrier had in 2006 placed orders with Boeing for 68 aircraft -- 27 Dreamliners, 15 B777-300ERs, eight B777-200LRs and 18 B-737- 800s.

The airline has so far taken delivery of 21 Dreamliners, 12 777-300ERs, eight B777-200LRs and 18 B-737-800s.

The delivery of three B777-300ERs was deferred in the wake of the downturn in the global aviation sector in 2008 as there was no "cancellation" clause in the original purchase agreement with Boeing Company.

The airline has, however, now decided to take the delivery of the remaining three B777s as well but has not yet fixed any time line for their induction in the fleet.