Aviation · India · Industry · Strategy

Air India sells its aircraft to reduce debt.

In a move to reduce its  debt burned , Air India sold 9 of its Boeing dream liner aircrafts for a whooping 7000 crores. The company sold these aircrafts in order to reduce the bridge loan the company has raised in order to buy these aircrafts. This is a modern day strategy followed by many airlines where the company sells its aircraft to lease it back for a longer period so that it can use it. The company followed the strategy in order to reduce its debt burden which it has accumulated over a very long period.

Air India has 131 aircrafts in total from various manufacturers like Boeing , Airbus, ATR and CRJ’s. In a statement given to PTI Air India sources said “Air India has sold all the nine Dream liners to one Singaporean lessor for a little over Rs 7,000 crore. These planes have now been taken back on lease by the same firm.” The company said that it will use Rs6,000 crore to repay the bridge loan while the remaining amount will be used for other purposes.

Air India is currently suffering from a huge debt situation due to increase in competition and a total debt of Rs 40000 it has accumulated in last few years. The silver lining to this story is that the company will show a positive quarter with Rs 6 crore operating profit. The company is surviving on a bailout package provided by the Indian government and hopes to make some profit in the near future.

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