Air India makes pre-payment to Boeing for 220 planes
Air India has made pre-delivery payment to US-based aircraft manufacturer Boeing for the 220 planes, Chief Financial Officer Vinod Hejmadi has said.
Pre-delivery payments (PDPs) are instalments that an airline has to pay the manufacturer when the aircraft are being built. It can amount to about 30 per cent of the price of the aircraft.
A year after being acquired by the Tata group, Air India had in February placed an order for 470 planes — 250 with European plane maker Airbus and 220 with Boeing — in the world’s largest single-tranche aircraft purchase order. The list price for 220 Boeing planes is approximately $34 billion.
In a message to employees, Hejmadi said, “Glad to inform you that yesterday Air India made the payment for 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 $ at the best rates.”
He said the airline had a “very short period” to arrange the funds and the entire deal was ably executed by its finance department and the commercial department. (Source: Business Standard)