New Delhi, Dec. 26: The government today gave its go-ahead to Air India to sell five of its long-haul Boeing 777 aircraft to Etihad Airways, giving a much-needed fillip to the national carrier’s turnaround plan.
The proposal for the sale of these wide-body aircraft was cleared at a meeting of the Cabinet Committee on Economic Affairs chaired by Prime Minister Manmohan Singh, sources said.
Air India had earlier finalised the deal with the Abu Dhabi-based carrier, which has also picked up a 24 per cent stake in Jet Airways worth over Rs 2,000 crore. Though both Air India and Etihad have remained tight- lipped about the deal size, it is estimated that Air India could get $300-350 million through the sale of five of its Boeing 777-200 LR (long range) planes, which have an average age of six years.
The money will be utilised by Air India to partly pay off its huge debt and liabilities of over Rs 20,000 crore. The two airlines had signed a “letter of intent” in October for an undisclosed amount, which was later approved by the national carrier’s board. The deliveries of these aircraft are likely to start around March-April, the sources said.
According to Etihad officials, the carrier is likely to use these on the new Abu Dhabi-Los Angeles route.
Each of these planes will be re-fitted in a three-class configuration consistent with Etihad’s fleet. With this acquisition, the Abu Dhabi-based carrier’s fleet will be expanded to 87 aircraft, with 14 new deliveries from manufacturers during 2013, the carrier said in a statement. The flights to Los Angeles are supposed to start from June 1.
The purchase comes as Etihad finalises a new fleet order to meet its growth and expansion requirements till 2025. The Boeing 777-200 LRs have a range of 17,370 kilometre that can allow Etihad to connect almost any city in the world from its Abu Dhabi hub.
Selling the B777s was also part of its turnaround plan as Air India has replaced it with B787 Dreamliners on long routes.