JPMorgan/Ex-Im finance Boeing planes for Air India
State-owned National Aviation Co. of India Ltd (NACIL), the operator of Air India, has agreed to a deal to raise about $1 billion through an 11-year loan from JPMorgan to fund the purchase of 10 Boeing aircraft.
The loan will be guaranteed by the U.S. Export-Import Bank and is expected to save the struggling carrier about $1 million a month in interest costs.
NACIL, an entity formed after merging domestic carrier Indian Airlines and international operator Air India, said it will lose close to $1 billion in the 2008-2009 fiscal year. The Ex-Im Bank, the U.S. government’s trade financing arm, typically offers loans at rates cheaper than external commercial borrowings raised from the market, on the purchase of U.S. goods or machinery.
The loan will be used to finance three Boeing 777-200 and four 777-300 planes for Air India's international operations, as well as three 737-800 planes for domestic routes. The planes are part of a larger order, made in 2005, for 68 aircraft from Boeing and 43 planes from Airbus, at a total cost of $15 billion.
In the last 18 months, the carrier's debts have nearly tripled, to more than $3 billion as of June. It has been looking at selling off some of its real estate assets, said to be valued at more than $2 billion.
JPMorgan/Ex-Im finance Boeing planes for Air India
