Air India Assured of Funds for Record-Breaking Aircraft Deal

During the CAPA India Aviation Summit in New Delhi, Air India Ltd. CEO Campbell Wilson revealed that the company is in discussions with banks to finance its latest aircraft order, thanks to the support of its new owner, Tata Sons Ltd. Wilson assured that the financing of the aircraft is available since they already received the support of Tata Sons. He mentioned that the company has utilized some of its internal funds for the down payments on the aircraft.

The CEO of Air India Ltd., Campbell Wilson, shared during his interview with Bloomberg News at the CAPA India Aviation Summit in New Delhi that the company has the potential to obtain funding for their new aircraft orders, with the assistance of their new parent company, Tata Sons Ltd. The airline has already allocated some of its internal resources for the initial payment of the aircraft. Tata Sons is backing the aircraft order, securing its financing, as stated by Wilson.

Air India has ordered 470 aircraft from both Boeing Co. and Airbus SE, with deliveries set to commence later this year. It is customary to offer discounts for such substantial purchases. To fund the order, the carrier plans to employ cash, shareholder equity, and aircraft sale and leaseback, according to Wilson, who disclosed this information last month. The airline’s aim is to compete with Emirates and Qatar Airways, which control profitable routes from India to Europe and the US through their Doha and Dubai hubs, by expanding its fleet.

Air India

Wilson did not mention the banks that Air India is negotiating with.

According to Sydney-based CAPA Centre for Aviation, India has rebounded faster than many other countries in terms of air travel, thanks to a robust domestic market and an expanding middle class. Analysts predict that domestic air traffic will increase by 20% and reach 160 million passengers by March 2024. Airlines in the country might operate a total of 1,400 aircraft by 2030.

To meet the growing demand, India is planning to spend approximately 980 billion rupees ($12 billion) on airports over the next two years, including constructing new terminals and refurbishing existing facilities. Smaller cities, where air travel adoption is currently low, are expected to experience much of this expansion.

According to the director general of the Association of Asia Pacific Airlines, Subhas Menon, India has not been performing up to its potential in recent decades. Menon stated that the Indian government is taking a natural step towards building up its potential as an aviation hub.

Air India is getting ready to merge with Vistara, a full-service carrier jointly owned by Singapore Airlines Ltd. and Tata Group. In order to improve its widebody aircraft, Air India is investing $400 million to upgrade its in-flight entertainment systems and seats with new products.

Furthermore, in 2021, Tata, the biggest conglomerate in India, acquired Air India from the government for $2.4 billion, concluding years of unsuccessful efforts to privatize the debt-ridden airline that relied on taxpayer-funded rescues to stay afloat. This high-profile sale under the leadership of Prime Minister Narendra Modi marked the end of an era for the struggling carrier.

Also Read: Latest Indian Aviation News and Aviation News

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