AI in talks with Air Canada to lease out five Boeing 777s

Mumbai, May 27: Cash-strapped

is negotiating a deal with Air

to dry lease five of its Boeing 777-200 (long range) aircraft,

sources said.

"We are in discussions with Air Canada to lease out these aircraft," Air India sources told PTI.

A team of officials from Air India would soon visit Canada to discuss modalities like leasing cost, etc in this regard, sources said, adding that the deal may be finalised as early as within next two-three weeks.

A founding-member of the Star Alliance, Air Canada is Canada's largest airline serving over 180 destinations in five continents. Besides, it also operates regional service Air Canada Express.

With a combined fleet of 362 aircraft, a mix of Boeing, Airbus and Embraer aircraft, the Canadian flag carrier is the 15th largest commercial airline in the world, according to its website.

The state-run AI had floated global tenders, offering five of its eight Boeing 777-200 LRs on dry-lease for 8-10 years early this year.

Out of these, four were manufactured in 2007, one in 2008 and three in 2009. The decision to lease out the Boeing 777s came in the backdrop of planned induction of Boeing 787 Dreamliners, the first of which is expected to arrive early next month.

In all, Air India, which is sitting on a dent of Rs 43,000 crore and an accumulated loss of Rs 20,000 crore, is scheduled to take the delivery of six Dreamliners by next March, with four deliveries slated for this year.

These B-777s are on the US Exim guaranteed financing and are being offered as sub-lease. Currently, these aircraft are deployed in AI's long haul non-stop routes like those to the US and Canada.

But with the proposed induction of Dreamliners, Air India plans to operate these routes with the latest offering from Boeing.

The state-owned carrier has already invited proposals from banks and financial institutions to raise short-term loans up to USD 500 million to take delivery of the first four Dreamliners.

PTI