Air India loss Rs 800 cr in books in sale of 5 Boeing 777 to Etihad

Jul 21 2014, 21:10 IST
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The five planes were sold to Abu Dhabi-based Etihad at a price of USD 336.5 million, he said.(Reuters) The five planes were sold to Abu Dhabi-based Etihad at a price of USD 336.5 million, he said.(Reuters)
SummaryHe also said that the planes were found uneconomical primarily due to high fuel cost and low yields due to competition.

Air India made a loss of Rs 800 crore in the books in the sale of five Boeing 777 aircraft to Etihad Airways as these aircraft had depreciated in the books over 20 years, Lok Sabha was informed today.

However, the national carrier generated a surplus of over USD 25 million after prepayment of aircraft loan and saved a further USD five million per month towards loan and interest repayment, Minister of State for Civil Aviation G M Siddeshwara said in reply to a question.

The five planes were sold to Abu Dhabi-based Etihad at a price of USD 336.5 million, he said.

Referring to the losses, he said based on the book value of these planes, "book loss on sale of these five aircraft would be approximately Rs 800 crores as the aircraft had depreciated in the books over a period of 20 years while the loans were amortized over a period of 12 years".

However, the national carrier generated a surplus of USD 25.735 million after prepayment of the Aircraft loan when the national carrier sold these five B777-200LR aircraft, he said.

Further, a saving of USD five million per month was generated towards loan and interest repayment, resulting in improved cash flow, Siddeshwara said.

He also said that the planes were found uneconomical primarily due to high fuel cost and low yields due to competition.

The sale followed "the due process and with the approval of the competent authority", as the operations of these planes had led to huge losses over the years, further aggravating the acute financial position of Air India, he said.

Replying to another question, Siddeshwara said a total of 227 pilots and co-pilots have been selected for training to fly wide-body, long-haul Boeing 787 Dreamliners.

Among those being trained are 109 pilots and co-pilots, who originally flew narrow-body planes, and 118 who already operate wide-body aircraft.

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