Air India Eyes $200 Million Loan to Expand Boeing 777 Fleet

Air India is in discussions to raise a bank loan of approximately $200 million to fund the acquisition of a fleet of Boeing 777 aircraft, as per news reports. The loan will be channelled through AI Fleet Services IFSC Ltd, a GIFT City-registered subsidiary of the airline. The deal, which had seen delays following a recent aircraft incident, has regained momentum as the airline aims to strengthen its long-haul fleet amid delivery constraints.

Acquisition Strategy and Financing Structure 

AI Fleet Services IFSC Ltd, the borrowing entity, manages both purchases and leases for the Air India Group, which includes Air India and Air India Express. The loan is expected to fund the acquisition of 6 Boeing 777 aircraft currently in operation, primarily serving India-US routes. 

These planes, aged between 11 and 13 years, were originally leased and are now being considered for full purchase from a US-based aircraft leasing company. According to insiders, the loan pricing may be linked to the Secured Overnight Financing Rate (SOFR), though terms are still under discussion.

Operational Urgency Amid Fleet Limitations

The timing of this move reflects Air India’s ongoing efforts to build operational resilience amid supply chain disruptions that have delayed aircraft deliveries. Despite having placed orders for 570 aircraft from Airbus and Boeing since its acquisition by Tata Group in January 2022, the airline continues to face fleet shortages. 

To ease these constraints, Air India is reportedly exploring options to fast-track delivery of 50 Boeing 737 Max jets originally destined for Chinese airlines. These temporary purchases, including the Boeing 777s, are intended to fill critical capacity gaps while new aircraft arrive.

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Conclusion

As Air India pushes forward with its ambitious expansion plans under Tata Group ownership, the pursuit of a $200 million loan signals its commitment to maintaining uninterrupted international operations. The proposed acquisition of leased Boeing 777s not only ensures fleet stability in the short term but also positions the airline to better serve key global routes while awaiting new deliveries.

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