Air India puts its Dreamliners for sale, leaseback

Seva Lamberdar wrote:NEW DELHI: Air India has put all its newly-acquired Boeing 787-8 Dreamliner planes for sale and leaseback and invited bids from prospective lessors by February first week, even as all of these aircraft remained grounded across the world.

Air India and other Dreamliner operators across the world have grounded their entire fleet of 50 B-787s delivered so far following a directive from the US Federal Aviation Authority after a fire risk reportedly caused by a battery problem.

In spite of this, the national carrier has gone ahead with its plan of sale and leaseback, which has already been approved by the government as part of its turnaround and financial restructuring plans............................

[url=http://timesofindia.indiatimes.com/business/india-business/Air-India-puts-Boeings-Dreamliner-planes-up-for-sale-leaseback/articleshow/18225431.cms

Hellsangel wrote:Sevaji, when will you start writing about politics in Ottowa and Toronto or at least about Air Canada?

panini press wrote:It is hard to imagine a worse time to sell these planes. Buy high and sell low -- the Air India way.

Seva Lamberdar wrote:NEW DELHI: Air India has put all its newly-acquired Boeing 787-8 Dreamliner planes for sale and leaseback and invited bids from prospective lessors by February first week, even as all of these aircraft remained grounded across the world.

Air India and other Dreamliner operators across the world have grounded their entire fleet of 50 B-787s delivered so far following a directive from the US Federal Aviation Authority after a fire risk reportedly caused by a battery problem.

In spite of this, the national carrier has gone ahead with its plan of sale and leaseback, which has already been approved by the government as part of its turnaround and financial restructuring plans............................

http://timesofindia.indiatimes.com/business/india-business/Air-India-puts-Boeings-Dreamliner-planes-up-for-sale-leaseback/articleshow/18225431.cms

b_A wrote:This sounds like just an accounting trick. Sell and lease them back just to manipulate the assets/liabilities columns.

panini press wrote:

b_A wrote:This sounds like just an accounting trick. Sell and lease them back just to manipulate the assets/liabilities columns.

That is correct. But the way the economics will be factored into the deal right now will be disadvantageous to whoever wants to offload it from their books. That's why this is bad timing to do this. Whether they offload the assets now or in a year, nobody will be able to fly these planes and recognize revenues until Boeing solves the battery problem.

panini press wrote:In normal times, what they are doing is good practice, and it something that most global airlines have all done. It's just that it is a bad time to do this specifically for the Dreamliners, because of the uncertainty that surrounds the assets that AI seeks to move off its balance sheet. AI is already betting that the planes will be operable and the battery defect will be resolved to its satisfaction -- that is why they are willing to lease the planes back even now when they are grounded by Indian regulators. So if you make the bet that the problem will be solved, why do you want to give up value on the valuation of the capital it has? That's what I am unable to understand in the AI decision.