Air India Agrees $1 Billion Loan

National Aviation Company of India (NACIL), the parent of national carrier Air India has negotiated a $1.06 billion loan from JPMorgan Chase & Co to fund the acquisition of ten Boeing airliners.  It will use the funds to buy three B777-200s, four B777-300s for its international services and three B737-800s for domestic routes.  These are part of the huge contract for 68 Boeing and 43 Airbus jets the carrier placed in 2005.  Earlier this year, NACIL raised $1 billion from a consortium led by IDBI Bank to fund the purchase of 21 Airbus airliners.
Air India has already taken delivery of 48 of the 111 aircraft it has on order, and says it has no plans to defer the remainder despite the tough economic environment.  The airline, which is carrying debts of $3.2 billion according to Indian Civil Aviation Minister, Praful Patel, says that it has never defaulted on any of its loans and it will wait to see how the Indian economy recovers, but adds that the new jets are replacing older ones it is retiring or jets that are being returned to lessors.  According to the Indian Civil Aviation Ministry, Air India carried 6.5 million passengers during June 2009, giving it 18% of the market, behind Kingfisher with 24.4% and Jet Airways/JetLite with 23.9%.