Air India Seeks $200 Million Loan to Purchase Boeing 777 Aircraft
Air India is arranging a bank loan of approximately $200 million to purchase Boeing 777 aircraft from a U.S.-based aviation leasing company, according to sources close to the transaction.
The request is being made through AI Fleet Services IFSC Ltd., a subsidiary of Air India registered in GIFT City, India. This entity handles aircraft acquisition and leasing for the group, which includes both the full-service airline Air India and the low-cost carrier Air India Express.
A Key Operation Amid Logistical Delays
Negotiations for financing began earlier this year but were paused following last month’s accident involving a Boeing 787 Dreamliner in Ahmedabad. However, discussions have since resumed, and the deal is progressing, though details may still change.
This specific purchase comes at a challenging time: Air India is facing difficulties in expanding its fleet due to supply chain bottlenecks affecting the delivery of new aircraft and availability in the secondary market.
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Operating but Not Owning
Currently, the six Boeing 777s the airline intends to acquire are already operating under its banner. Some of these aircraft are 11 to 13 years old and are primarily used on routes between India and the United States, according to data from Flightradar24.
The goal of this acquisition is to ensure the company’s operational continuity while it awaits the arrival of new aircraft.
A Long-Term Strategy with Massive Orders
Since the Tata Group took control of Air India in January 2022, the airline has launched an aggressive renewal plan, including orders for 570 new aircraft from Airbus and Boeing. Part of this strategy involves the possibility of accelerating deliveries of Boeing 737 Max aircraft, potentially taking over 50 units originally destined for Chinese airlines.
Financing Tied to International Rates
The $200 million loan may be linked to the Secured Overnight Financing Rate (SOFR), according to the same sources.
This operation reflects Air India’s efforts to strengthen its competitive position in the international market while navigating global logistical challenges and advancing its transformation plan under Tata Group’s leadership.
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