Air India makes part payment for Boeing jet order, funds arranged from multiple banks

Tata Group-owned Air India has made pre-delivery payment (PDP) to Boeing for the 220 planes it has ordered, the airlines chief financial officer Vinod Hejmadi said in a message to employees on Friday. Pre-delivery payments are instalments that an airline has to pay the manufacturer as part of aircraft purchase agreement. These payments are generally a percentage of the total deal value. Air India had placed an order worth $34 billion with Boeing for 220 aircraft.

“Glad to inform you all that on Thursday Air India made the payment for pre-delivery payments (PDP) to Boeing for the aircraft deal. This was the largest deal in the history of Air India. The funds were arranged from multiple banks at a very competitive rate and converted to US dollar at the best rates. We had a very short period to arrange the funds,” Hejmadi said.

Air India’s Boeing order includes the purchase of 190 737 Max aircraft, 20 787s, and 10 777Xs. This order also includes options for Air India to purchase more aircraft. Air India’s CEO & MD Campbell Wilson, in his weekly message to employees, commended the airline’s commercial, strategic procurement, finance, treasury and legal teams for successfully putting together the huge financing deal for the  new fleet in remarkably quick time.

“I’ll not go into details, but it was another historic achievement for the new Air India,” Wilson said. He said the airline’s teams were in Hamburg, Germany at the Aircraft Interiors Expo, checking out the latest and greatest seats, inflight entertainment and equipment options for its large fleet of new aircraft.

“Lead-times for designing bespoke seats are long and measured in years, so it will be a step-wise journey to the end state, but having joined the team for a day, I am genuinely excited about what we’ll eventually be able to offer our customers,” Wilson said.

San Francisco-Mumbai flight cancelled after glitch

Air India has cancelled its flight scheduled to fly from San Francisco to Mumbai due to a technical issue in the Boeing 777 aircraft. Air India said the affected people have been offered alternative flights or a full refund for the cancelled flight.It will reimburse all expenses customers may incur towards hotel accommodation and transportation until they take a flight, a spokesperson said. — PTI

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