State-run Air India's board on Tuesday approved a USD$195 million bridge loan for financing its purchase of two Boeing 787 Dreamliner aircraft, as the carrier takes its first steps towards a controversial fleet upgrade.
The bridge financing, led by Standard Chartered Bank's India unit, is expected to be closed soon, Air India said in a statement.
The carrier will push ahead with its purchase of 27 787 aircraft, Indian aviation minister Ajit Singh said last week, despite its heavy debt burden and a long-running dispute with Boeing.
Cash-strapped Air India, which owes about USD$500 million to oil companies and USD$240 million to airports, is currently negotiating for nearly USD$1 billion as compensation from Boeing for the delayed delivery.
Air India's board also approved the direct import of jet fuel and hedging of fuel, the statement said.
India last month approved direct import of jet fuel in a move to help reduce costs in the sector where five of the top six carriers are in the red.