Air India in talks with Commercial banks to raise Rs 3,000 crore loans: Report

Air India is in talks with Commercial banks to raise Rs 3,000 crore loan, reported Business Standard. As per the report, the airline is looking to raise the capital to make the down-payment under sale-and-leaseback agreements with lessors.

The Business Standard report also mentioned that the carrier is in talks with several lenders. Quoting a top State Bank of India Executive, the report said that the loan will be provided by a consortium of lenders.

Also Read: Air India formalises the deal to purchase 470 Airbus and Boeing aircraft

In one of the biggest aircraft order in the aviation history, Air India had firmed up its order with Airbus and Boeing to buy 470 aircraft. The orders include 34 A350-1000, 6 A350-900, 20 Boeing 787 Dreamliners and 10 Boeing 777X wide-body aircraft, as well as 140 Airbus A320neo, 70 Airbus A321neo and 190 Boeing 737MAX narrow-body aircraft.

As per Business Standard, the airline is allowed to purchase wide-body planes but has to adopt sale-and-leaseback model for the narrow body planes. Under the sale-and-leaseback model, a new aircraft is sold to a lessor, which then immediately leases it back to the airline, helping the carrier free up its cash flow.