Mumbai/New Delhi: Air India is set to record annual savings of about Rs 370 crore through the sale of five Boeing 777-200 LRs to Abu Dhabi-based Etihad Airways. Earlier this week, the West Asian carrier, which recently received regulatory approvals to acquire 24 per cent stake in Naresh Goyal-promoted Jet Airways, signed a letter of intent for the sale of the aircraft by Air India.
A senior Air India official told Business Standard, “We have just reached an understanding with Etihad. A formal sale agreement is yet to be signed. It will require an approval from the Air India board and the government,” he added. Deliveries are scheduled to start early 2014.
“We were paying $5 million as loan principal and interest on these planes each month. So, there would be savings of about $60 million a year after the planes are sold,” he added, declining to specify the size of the deal; industry estimates peg it at Rs 3,100 crore ($500 million). The sale proceeds would be used to clear loans against the aircraft.
The sale of the aircraft would help improve Air India’s financial performance, as these planes have high operating costs. The airline has been struggling to record break-even on routes in which it had deployed the aircraft.
Read news in full 10/10/13 Aneesh Phadnis & Sharmistha Mukherjee/Business Standard
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