Tuesday, September 24, 2013

Etihad, Cameroon Air Keen to Buy Air India Jets: India's Flag Carrier Plans to Sell Five 777-200 Long-Range Planes

September 24, 2013, 11:54 a.m. ET


The Wall Street Journal

NEW DELHI—Etihad Airways and Cameroon Airlines Corp. are among companies that have expressed an interest in buying five Boeing  777-200 long-range passenger jets from Air India Ltd., a person familiar with the matter said Tuesday.

Flag carrier Air India put the five planes up for sale after higher jet fuel prices and a dearth of demand from Indian travelers forced it to ditch plans to operate nonstop long-distance flights to North America. It tried to lease the planes in 2011 but found few takers.

Airlines, cargo operators and other interested parties have until Thursday to make an offer. The deadline has been advanced from the end of December because of the interest from Etihad and Cameroon Airlines, as well as from an unnamed leasing company, the person told The Wall Street Journal.

He said teams from Etihad and Cameroon Airlines have already inspected the planes.

"The offers will be evaluated by the management [of Air India] and a decision will be taken soon after," the person said. "Some of the interested parties wanted the last date for bidding to be advanced from end-December so that they entire process can be expedited."

The person didn't disclose the potential value of Air India's five 777-200 LR jets. A brand-new 777-200 LR jet has a Boeing list price of $296 million.

Thomas Clarke, a spokesman for Etihad, declined to comment. Efforts to reach executives at Cameroon Airlines for comment were unsuccessful.

Air India acquired four of the Boeing planes in 2007 and one in 2008. The airline has eight 777-200 jets—part of its fleet of 108 planes. The 777-200 long-range plane can fly up to 17,395 kilometers with a full payload of 301 passengers, according to Boeing. The jets owned by Air India have 238 seats.

Air India is selling the jets in effort to become profitable. The airline hasn't posted a net profit since 2007 when the Indian government merged Indian Airlines and Air India to create the current entity.

Air India wants to replace the fuel-guzzling 777-200 jets with Boeing's more fuel-efficient Dreamliner jets. It ordered 27 Dreamliners in 2006 and has received eight so far.

"When the 777-200s were acquired, it was thought that people would prefer long-distance, nonstop travel to places like San Francisco and Seattle from India. But most preferred to travel with a stopover as it was cheaper as well," the person said.

Source:  http://online.wsj.com