Air India has invited bids for the sale and leaseback of five Boeing 787-8 (Dreamliner) aircraft, a document uploaded on the airline website said on Thursday.
These aircraft that were delivered to Air India by the US-based aircraft manufacturing company between August 26, 2013, and January 28, 2014, carry a reserve price of $116 million an aircraft, said to the tender document.
Air India, which is expecting to close the bid by July 14, will immediately lease back the aircraft from the lessors, after selling the aircraft, under an operating lease for 12 years keeping an option to extend the lease period.
The carrier, which had in January 2006 ordered 27 fuel efficient Dreamliners, has taken the delivery of 14 such aircraft till date. It has already sold and leased seven of the 14 aircraft in its Dreamliner fleet.
A senior Air India official had earlier told FE the carriers Dreamliner fleet is expected to stand at 18 by the end of 2014, with two aircraft expected to be delivered by July and another two by December.
Burdened with high taxes, high jet fuel prices and costly airport charges, airlines in India have resorted to sale and leaseback of aircraft to bolster their balance sheet. Under the sale and leaseback transaction, airlines sell newly acquired aircraft to buyers, mostly leasing companies, at a price which is in most cases higher than the ones paid to aircraft manufactures since airlines usually get a discount for bulk orders. The airlines then lease back the same aircraft, thus making money in the process.
Air India, which currently has over R44,000-crore debt in its balance sheet, as of December 31, is hoping for a turnaround by deploying fuel efficient Dreamliner fleet on several of its busiest routes.
Other airlines like SpiceJet and Jet Airways have in the recent past placed huge orders with manufacturers like Boeing. In March, SpiceJet had signed a deal with Boeing to buy 42 737 MAX jets in a deal worth $4.4 billion at list prices, whose delivery would begin in 2018. Jet Airways will start taking deliveries of Boeing 787-9 planes from 2017.
