American bank to give $1.3 bn loan to AI

Exim Bank has decided to give loan guarantees to support the airline's fleet acquisition from Boeing.

Ahead of a GoM meeting to finalise Air India’s financial restructuring plan,the US Exim Bank has decided to give loan guarantees of USD 1.3 billion to support the airline’s fleet acquisition from aerospace company Boeing.

A decision to this effect was taken last week in Washington by the Board of Directors of the Export-Import Bank of the US.

The bank approved USD 1.3 billion in loan guarantees supporting Boeing commercial aircraft sales to Air India,a statement said after the Board meeting.

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In addition to these final commitments,the Board also approved a USD 2.1 billion preliminary commitment to support future deliveries of Boeing aircraft to Air India,it said.

“Upon approval of the conversion of the preliminary commitment into a final commitment,the transactions in total will support the export of 30 Boeing aircraft to the state-owned,national flag carrier of India,” it added.

Air India has pending orders for 27 Boeing 787 Dreamliners,the deliveries of which are expected to begin in the next two months. These are part of the 68-aircraft order placed by the national carrier with the US plane manufacturer.

This support would enable Air India to raise finances for acquiring latest technology aircraft at competitive interest rates compared to commercial financing,official sources said.

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The Group of Ministers (GoM),at its next meeting later this month,is likely to take a final call on the acquisition of these planes whose deliveries have been delayed by almost three years due to various factors,including strikes by Boeing workers.