Air India to lease 14 Airbus A-320s to strengthen domestic network

MUMBAI: National carrier Air India plans to lease 14 Airbus A320 planes, according to a document on its website

The national carrier has out two separate tenders calling for bids for 14 old and an additional 14 new A320 planes. It will then choose a total 14 planes from the responses.

The lease period is up to six years.

The airline wants the delivery of the first three planes by March 2015, the next five by March 2016 and the remaining by the end of the next fiscal year.

Last date for the receipt of bids is May 29.

Air India was one of the launch operators of the A320 aircraft and purchased 31 of them during the years 1989 to 1993. Again, during 2006 to 2010, it purchased 43 A320 family aircraft as part of its mammoth $15 billion 111 plane order to Toulouse-based Airbus and its American rival plane-maker Boeing.

The national carrier has been constantly loss-making since 2007 because of an ill-planned merger with erstwhile state-owned domestic carrier Indian Airlines, government norms which forced it to fly to unprofitable routes to enhance air connectivity an inflated salary bill, industry problems of high fuel and loan costs and cutthroat competition from low cost carriers.

The carrier last week floated a tender to raise a bridge loan of $500 million for the next 4 of its Boeing Dreamliner planes which will be delivered between May and November this year.

Air India had ordered 27 of the planes. It has concluded the sale and lease back for its first seven aircraft and tied up for the bridge financing of the next seven, most of which have been delivered.

The loan will be repaid on conclusion of a sale and lease back deal of the planes. The airline however added this loan will not be backed by a government of India guarantee.