By Santanu Choudhury
NEW DELHI--Air India Ltd. has invited bids to sell seven 787-800
Dreamliner planes to leasing companies and hire them back even as
half a dozen of the Boeing Co. (BA) jets remain grounded.
A company spokesman told The Wall Street Journal that the sale
and leaseback program is part of a plan by the loss-making
state-run carrier to raise funds and move toward profitability.
Airlines sometimes sell planes at a premium to their buying
price to leasing companies to raise cash and then lease them back
on monthly rentals. The option is considered an effective method to
free up capital.
Air India has received delivery of six Dreamliner jets since
last September, and a seventh is expected later this month, the
spokesman said.
The delivery of the seventh aircraft is, however, unlikely
before U.S. regulators and air safety investigators complete a
probe into causes of recent incidents of battery fire and fuel
leaks on the new jets.
India's Directorate General of Civil Aviation has grounded Air
India's six Dreamliner planes following a similar move by the
Federal Aviation Administration of the U.S. pending a safety
review.
Air India--one of the first customers for the
Dreamliner--ordered a total of 27 planes in January 2006. The
carrier plans to take the delivery of six more jets by the end of
December and the remaining 15 through 2016.
"We will sale and leaseback the remaining Dreamliner aircraft as
and when we receive them, the Air India spokesman said.
The spokesman said Air India will be able to get a favorable
price from the leasing companies as the cost of the Dreamliner has
increased from the time the airline placed its order.
According to a tender document posted on the airline's website,
Air India will lease back the initial seven Dreamliner planes
"under an operating lease for a period of 12 years with an option
to extend."
Bidders have until Feb. 5 to submit their offers.
The new Dreamliners, powered by General Electric Co.'s (GE)
GEnx-1B engines, are key to the carrier's attempts to make profits
after five straight years of losses since 2007.
Air India said it will maintain the Dreamliner planes during the
tenure of the lease. It plans to enter into a maintenance agreement
with GE for the engines installed on the planes.
Write to Santanu Choudhury at santanu.choudhury@dowjones.com
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