Air India ties up with foreign banks to acquire three B777 planes

State-owned Air India has tied up with UAE-based First Abu Dhabi Bank as well as Standard Chartered Bank and Mashreq Bank to avail short-term loans for acquiring three Boeing 777 aircraft, Union minister Jayant Singh said today.

Two of the aircraft are to be used for ferrying VVIPs, the minister of state for civil aviation said in a written reply in the Lok Sabha.

The delivery of the three B777-300 ER planes is scheduled to be completed next month -- two in January and one in February.

"Air India has signed a short-term buyers credit facility agreement with First Abu Dhabi Bank PJSC jointly with Standard Chartered Bank and Mashreq Bank PSC for acquisition of three B777-300ER aircraft," the minister said.

In early November, the disinvestment-bound airline issued a revised tender (after first floating it in October), soliciting interest from lenders for a loan worth up to USD 535 million (around Rs 3,460 crore).

Last month, the airline also floated tenders for securing loans worth over Rs 1,100 crore for modification of two Boeing aircraft for ferrying VVIPs -- the president, vice-president and prime minister.

In 2006, Air India placed orders with Boeing for 68 aircraft 27 Dreamliners, 15 B777-300 ERs, eight B777-200 LRs and 18 B737-800s.

Of these, the state-run carrier has already taken the delivery of 65 planes, including 12 B777-300ERs.

Following the downturn in the global aviation sector, the delivery of three B777-300ERs was postponed in 2010 as there was no "cancellation" clause in the original purchase agreement with Boeing Company.

Then, in September 2015, the carrier decided to take delivery of the remaining three planes as per the 2006 purchase agreement.