State owned aviation company Air India was forced to ground two 747 dreamliner aircrafts despite of a $4.5 billion bailout from the government. The planes were grounded because of lack of spare parts and was not able to cover the repair cost of these aircrafts. In a statement given to the Indian parliament , Junior Aviation Minister Mahesh Sharma said that due to financial crunch the engineering department was not able to buy relevant parts from Japan and was paying an additional parking of $1 million every month for past 10 months.
The carrier has been in losses from the day it was merged from Domestic Carrier Indian Airlines. It amounts to 35% of the total market share and is facing stiff competition from other carriers like Jet Airways and Indigo Airlines.
Indian State carrier Air India is considering to start a direct flight to Washington. The move is planned to come in couple of months as Air India recently started a direct fight to San Francisco. It was the fourth US city connected directly by Air India first three being New- York , Newark and Chicago . The move was annonunced by Civil Aviation Minister Ashok Gajapathi Raju at a function organized prior to the launc h of direct flight to San Francisco. Air India is planning on connecting as many US cities as possible and would like to earn more profit from the sector.
The direct flight to San Francisco was in huge demand and was sold out within a few days of launch . Air India used to fly to Washington via New York and also to Los Angeles but was stopped after merger of Air India and Indian Airlines in 2011.
The flight to Sanfrancisco will be one of the longest flights with a duration close to 17 hours . Air India plans to use newly bought B77-200R aircraft on this route .This will be first direct flight from Air India to the US west coast. It would help connect India to Silicon Valley directly . The flight to San Francisco will depart of Wednesday Friday and Sunday and will arrive to Delhi on Monday , Thursday and Saturday .It will have a three configuration seating plan with 8 first class, 35 business and 195 economy class seats.
Air India currently flies to 35 destinations including middle east and Australia .
In a move to reduce its debt burned , Air India sold 9 of its Boeing dream liner aircrafts for a whooping 7000 crores. The company sold these aircrafts in order to reduce the bridge loan the company has raised in order to buy these aircrafts. This is a modern day strategy followed by many airlines where the company sells its aircraft to lease it back for a longer period so that it can use it. The company followed the strategy in order to reduce its debt burden which it has accumulated over a very long period.
Air India has 131 aircrafts in total from various manufacturers like Boeing , Airbus, ATR and CRJ’s. In a statement given to PTI Air India sources said “Air India has sold all the nine Dream liners to one Singaporean lessor for a little over Rs 7,000 crore. These planes have now been taken back on lease by the same firm.” The company said that it will use Rs6,000 crore to repay the bridge loan while the remaining amount will be used for other purposes.
Air India is currently suffering from a huge debt situation due to increase in competition and a total debt of Rs 40000 it has accumulated in last few years. The silver lining to this story is that the company will show a positive quarter with Rs 6 crore operating profit. The company is surviving on a bailout package provided by the Indian government and hopes to make some profit in the near future.