Lok Sabha Question No. 2904 (UNSTARRED), answered on 2018-01-04
Subject: Purchase of Aircraft by Air India
Ministry: CIVIL AVIATION
Asked by: R.P. MARUTHARAJAA, M. UDHAYAKUMAR, BALASUBRAMANIAM SENGUTTUVAN

## GOVERNMENT OF INDIA MINISTRY OF CIVIL AVIATION LOK SABHA UNSTARRED QUESTION NO. : 2904

(To be answered on the 4th January 2018)

Purchase of Aircraft by Air India

2904.

SHRI RPMARUTHARAJAA ADV. M UDHAYAKUMAR SHRI B SENGUTTUVAN

Will the Minister of CIVIL AVIA TION

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- (a) the number and types of aircraft purchased by Air India during the current financial year and source 0f finance for the same; being
- whether Air India has sought a loan of US $ 535 mililion to three Boeing planes including the two aircraft that would be used for ferrying VVIPs and if s0, the details thereof; buy
- (b) the details of income and expenditure of Air India in the year 2016-17;
- (d) whether the delivery of the three Boeing B777-300 ER planes is scheduled to take place in January/February next year and if s0, the details thereof; and (e) whether such aircraft acquisitions made by Air India in 2006 was one of the reasons contributing to the enormous debt of this carrier and if the details thereof and the action taken by the Government on the same?

## ANSWER

Minister of State in the Ministry of CIVIL AVIA TION

- (a) The information is attached as Annexure:
- (b): As per the Provisional Estimates for FY 2016-17, the details of the Income and Expenditure of AI is hereunder: given

1. Operating Revenue

Rs.21919 crore

2. Operating Expenses

Rs.21704 crore

Rs.215 crore

4. Total Revenue

Rs.22146 crore

5. Total Expenses

Rs.25789 crore

6. Net Loss

Rs.3643 crore

(Shri Jayant Sinha)

- (c) and (d): Yes, Madam: Air India has signed a Short Term Buyers Credit Facility Agreement with First Abu Dhabi Bank PJSC jointly with Standard Chartered Bank and Mashreq Bank PSC for acquisition of three B777-300ER aircraft out of which two are for Government of India operations to be delivered to the Air India in January 2018 and one B777-300ER aircraft for use by Air India to be delivered in February 2018.
- (e): The orders for acquisition of aircraft were mainly\_placed for replacing ageing fleet; improving schedule integrity etc Air India has been facing losses for the past many years on account Of a multitude of factors which, interalia, include:
- (ii) High Interest Burden
- (i) High Fuel Prices
- (iii) Increasing competition specially from low cost carriers
- (v) High Airport user charges
- (iv) High Debt Equity Ratio
- (vi) Adverse Impact of exchange rate variation due to weakening of the Indian Rupee:

Government had approved a Turnaround Plan  (TAP) Financial Restructuring Plan (FRP) for operational and financiai turnaround of Air India. The TAPIFRP provides equity infusion of Rs.30231 crore 2021 subject to achievement of certain milestones as laid down in the TAP/FRP Till date, an amount of Rs.26545.21 crore has been released as equity support to Air India. upto

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## Annexure to LSUSQ No.2904

| Aircraft Type   | No. of Aircraft   | Date of Purchase                    | Lender                                                                   | Amount in USD        |
|-----------------|-------------------|-------------------------------------|--------------------------------------------------------------------------|----------------------|
| B787-8          |                   | 11th July 2017                      | First Abu Dhabi Bank                                                     | 115.000 million      |
| B787-8          | 2                 | 23rd August 2017 & 30th August 2017 | Investec Bank                                                            | 123.000 million each |
| B787-8          |                   | 11th October 2017                   | Investec Bank                                                            | 123.000 million      |
| B777-300ER      | 2                 | 18th January 2018 & 31 January 2018 | First Abu Dhabi Bank jointly with Standard Chartered Bank & Mashreq Bank | 200.000 million each |
| B777-300ER      |                   | February 2018                       | First Abu Dhabi Bank jointly with Standard Chartered Bank & Mashreq Bank | 135.000 million      |

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