Bloomberg News

Air India Said Set for Government Approval to Buy Boeing 787s

February 04, 2012

Feb. 3 (Bloomberg) -- Air India Ltd., due to be the second operator of Boeing Co. 787s, will get final government approval to buy the planes next week, paving the way for the belated start of deliveries, two people familiar with the matter said.

The state-owned carrier’s plan to buy 27 planes will be signed off by a group of ministers at a meeting in New Delhi on Feb. 9, said one of the people, a civil aviation ministry official. The people declined to be identified as they aren’t authorized to release the information.

The airline will probably receive its first 787 this month, said the other person, an Air India official. The carrier will pay for the first two planes using a $230 million bridge loan, while it concludes a deal to sell and lease back the entire 787 fleet to help pare debts, he said.

Air India ordered the Dreamliners in 2005 as part of a plan to buy 68 passenger jets worth about $8.1 billion to expand operations and introduce more fuel-efficient aircraft. The carrier has subsequently struggled with debts from the expansion plan, along with high fuel costs and price wars, which has caused the government to grant 32 billion rupees ($660 million) in bailouts since April 1, 2009.

K. Swaminathan, a spokesman for Air India, declined to comment.

All Nippon Airways Co. began flying the first 787 commercially in October, more than three years late because of production delays at Boeing. Air India was originally due to start receiving its 787s in September 2008.

--Editors: Vipin V. Nair, Neil Denslow

To contact the reporter on this story: Karthikeyan Sundaram in New Delhi at kmeenakshisu@bloomberg.net

To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net


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