Air India in Talks to Borrow $361.6 million for Aircraft Order Payments

Air India is reportedly engaged in discussions with a group of banks to secure a loan of around INR 30 billion (approximately USD 361.6 million) to cover upcoming payments related to its aircraft orders. According to sources, the talks are with multiple lenders and pertain to Air India’s order for 470 aircraft placed earlier this year. The carrier intends to purchase the 70 widebody aircraft included in the order outright, while planning to secure the 300 narrowbody planes through sale/lease-back arrangements.

Earlier in June, Air India’s Chief Financial Officer revealed that the airline had already made a pre-delivery payment to Boeing for the 220 aircraft ordered from the manufacturer. This payment was facilitated through a syndicate of banks, and the airline had highlighted the need to secure funds within a limited timeframe.

Since being acquired by Tata Sons via its subsidiary, Talace Private Limited, Air India has embarked on an ambitious expansion and modernization initiative. Despite reporting a significant loss for the fiscal year 2022/23, the airline remains an attractive option for lenders due to its AAA/Stable rating by Indian ratings agency CRISIL. This rating is supported by a substantial INR 375 billion (approximately USD 4.5 billion) bank credit facility.