Air India Eyes 1,485 Crore Loan to Buy Boeing 777s from US Firm

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MUMBAI— Air India (AI), the flag carrier owned by the Tata Group, is seeking a $200 million bank loan to purchase a fleet of Boeing 777 aircraft from a US-based leasing company. The aircraft are currently operated by the airline on India-US routes, primarily connecting cities like Delhi (DEL) and New York (JFK).

The loan process is managed by AI Fleet Services IFSC Ltd., a subsidiary of Air India registered in GIFT City (GJ01). This entity is responsible for the airline’s fleet acquisitions and leasing activities for both Air India (AI) and Air India Express (IX), Bloomberg reported.

Air India to Buy Boeing 777s

Air India’s loan initiative is aimed at solidifying its long-haul service capabilities, especially on North American routes where demand remains high.

The six Boeing 777 aircraft under consideration are already part of Air India’s operational fleet, with aircraft ages ranging between 11 to 13 years.

These jets primarily service crucial routes such as Delhi (DEL) to New York (JFK) and Mumbai (BOM) to Chicago (ORD), according to Flightradar24 data.

The $200 million loan is being sought after prolonged negotiations that commenced earlier in the year. Progress had slowed due to the Air India Boeing 787 (IATA Code: 78X) incident in Ahmedabad (AMD) last month.

However, funding discussions have now resumed, and while specifics are still under negotiation, the loan is expected to be tied to the Secured Overnight Financing Rate (SOFR) benchmark.

Tata Group’s Fleet Expansion Strategy

Since the Tata Group’s acquisition of Air India in January 2022, the airline has aggressively pursued fleet modernization and expansion. Orders for 570 new aircraft have been placed with Airbus and Boeing, positioning the airline for long-term growth.

Additionally, Air India plans to accelerate deliveries of the Boeing 737 Max (IATA Code: 7M8) by taking over 50 jets initially destined for Chinese airlines, potentially bypassing supply chain delays that have hindered global aircraft production.

The acquisition of the existing Boeing 777s is a strategic interim measure, ensuring that Air India retains sufficient capacity on its busiest international sectors until new aircraft deliveries materialize.

This move aligns with Air India’s broader objective to reclaim market share on international routes and elevate its service standards under the Tata Group’s stewardship.

Air India Completes 787 Inspections

Air India (AI) has completed precautionary inspections of the fuel control switch (FCS) locking mechanism on its Boeing 787 and Boeing 737 aircraft.

The inspection followed a directive by India’s aviation regulator DGCA (Directorate General of Civil Aviation) after a fatal crash involving Air India flight AI171 from Ahmedabad (AMD) to London Gatwick (LGW).

The DGCA ordered all airlines to inspect these components by July 21, 2025, after the Aircraft Accident Investigation Bureau (AAIB) reported that premature fuel switch cut-offs led to the AI171 crash on June 12, 2025, resulting in 260 fatalities. Air India confirmed that no issues were detected during its inspections.

DGCA Directive and Inspection Findings

The DGCA issued a mandatory inspection directive on July 14, 2025, requiring all Indian operators of Boeing 787 and 737 aircraft to check the FCS locking mechanisms.

This move followed the AAIB’s preliminary findings that indicated both engines of AI171 shut down within a second of each other, shortly after takeoff from Ahmedabad (AMD).

Air India stated it voluntarily initiated these inspections on July 12, ahead of the DGCA mandate, and completed them on schedule.

The airline emphasized that “no discrepancies were found” in the locking mechanisms of its entire Boeing fleet, which includes 33 Boeing 787s.

Similarly, Air India Express (IX), the Tata Group’s low-cost subsidiary, operating approximately 75 Boeing 737s, also complied with the inspection directive.

Background of the AI171 Crash

On June 12, 2025, Air India flight AI171, a Boeing 787-8, crashed shortly after departing from Ahmedabad (AMD), en route to London Gatwick (LGW). Of the 242 passengers onboard, 241 perished along with 19 individuals on the ground, making it one of India’s deadliest aviation disasters.

The AAIB’s initial report pointed to an abrupt fuel cut-off to both engines as the primary cause. The cockpit voice recorder captured a moment of confusion where one pilot questioned the other about the unexpected shutdown, to which the co-pilot denied any intentional action.

Though the AAIB cited the FAA’s 2018 Special Airworthiness Information Bulletin (SAIB), which flagged potential FCS locking disengagement in certain Boeing models, it clarified that no direct safety concern had been formally established through an airworthiness directive.

Other Airlines Operating Affected Boeing Models

Beyond Air India and Air India Express, several Indian carriers also operate Boeing 737 and 787 aircraft. These include:

IndiGo (6E): Operating seven B737 MAX 8 and one B787-9 under lease agreements.
SpiceJet (SG): Operating a fleet of Boeing 737 aircraft.
Akasa Air (QP): Operating Boeing 737 aircraft.

However, since many of these planes are leased from foreign operators (under wet or damp leases), they are not registered in India and thus fall outside the jurisdiction of the DGCA’s inspection directive.

FAA and AAIB Observations

The FAA’s earlier SAIB in 2018 had noted concerns about the potential disengagement of the FCS locking mechanism on Boeing 787s and 737s. However, the absence of an airworthiness directive indicated that the issue was not deemed an immediate threat to operational safety.

While the AAIB referenced this bulletin, it did not issue any corrective recommendations specific to the locking mechanism in its preliminary findings on the AI171 crash. Further investigations are ongoing to conclusively determine all contributory factors.

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