AI seeks USD 155m loan for pre-delivery payment on 3 Boeing

Government-run Air India plans to raise up to USD 155 million (over Rs 1,000 crore) from banks/ financial institutions to make pre-delivery payment for three Boeing 777 aircraft that it is to induct in early 2018.
Air India had earlier sought deferment of the delivery of the three Boeing 777-300ER planes, which are part of its 68- aircraft order placed with the US aircraft-maker in 2006.
The state-owned carrier currently has 15 Boeing 777s in its fleet -- 12 of them B777-300ERs and the rest B777-200LRs.
"Air India is pleased to invite your bank/financial institution to submit a fully underwritten offer for Pre- Delivery Payment requirements (PDP) for three Boeing 777-300 ER aircraft," the airline said in the bid document released on its website today.

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.
However, the delivery of three B777-300ERs was postponed 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.

As per the terms of the agreement signed with Boeing Company, Air India has to pay 15 per cent of the gross cost of the aircraft as advance payment 24 months prior to delivery, the tender document said.

The loan would be repaid from aircraft delivery financing process, it said. The three aircraft are to be delivered to the carrier between January-March, 2018.
After dilly-dallying for many years, Air India had in September this year decided to take delivery of the remaining three planes as per the 2006 purchase agreement while rejecting a proposal, made by the Boeing Company, to convert them into single-aisle planes.
The US aircraft-maker had offered that it would convert the order into that for 11 Boeing 737 MAX aircraft.
"That process overrides deliverance and merely following
the laid down systems guarantees personal safety is sadly becoming the norm in almost all governmental organisations," he said.

Whether the variety of watchdogs that the nation has have been able to reduce the levels of corruption is a matter of debate, Lohani said the fact remains that they have been successful in stifling deliverance almost everywhere.
Wondering how mere non-adherence to a rule or process, howsoever silly though it may be, is regarded as an act of malafide, the Air India CMD said one single incident of straying from the path, even if done in the overall interest of the organisation or the nation is sufficient to wipe out years of proven deliverance.
"Mistrust has indeed continued for far too long under the garb of 'checks and balances' and transparency, with its attendant damages that are visible almost anywhere," he said, adding that when errors or mistakes are regarded as a malafide, best is not to commit them.

"And the only way that is possible is by not taking any decisions. This is the learning that has emerged over time and successfully assimilated by a large majority of those who are a part of the system," he said.
Further, the Air India chief observed that continuing to be fooled by a beehive of activity while remaining oblivious to the fact that remaining busy, is by no stretch of imagination akin to deliverance has also emerged as a hallmark of the rotten system.
Meanwhile in a Facebook post, Lohani said tendering has with passage of time emerged as the biggest hurdle in sarkari organisations.

"Fear grips the minds of those involved in it for even a slightest deviation even if helpful or carried out in the interest of the organisation can land people in a soup and there are cases galore in all organisations.
"When shall we start accepting the supremacy of deliverance and modify the tendering processes," he said.