Japan’s SMBC loans $120 million to Tata-owned Air India so that it can purchase an Airbus aircraft

Japan's SMBC loans $120 million to Tata-owned Air India so that it can purchase an Airbus aircraft

The Japanese lender SMBC has granted a $120 million loan to Tata Group-owned Air India so that it can buy an Airbus wide-body aircraft. Air India’s purchase of an A350-900 aircraft from Airbus, which was delivered in October 2023, was partially funded by the transaction.

Details on Japan’s SMBC loans $120 million to Tata-owned Air India so that it can purchase an Airbus aircraft

In a statement, SMBC claimed that AI Fleet Services, the GIFT City-based division of Air India, is the borrower and that the loan is a secured debt facility made available through its Singapore branch.

The acquisition is a part of the Tatas’ massive announcement to acquire 470 aircraft from Boeing and Airbus in total; AI has also provided stock. The cost of an Airbus A350-900 aircraft exceeds $300 million.

Hiroyuki Mesaki, the country head of SMBC for India, stated, “SMBC Group is pleased to expand upon its long-established relationship with Tata Group through this deal.”

He continued by saying that this is the bank’s first-ever airplane finance lease transaction.

After placing $70 billion in orders for 470 aircraft from Airbus and Boeing earlier this year, the Tata Group took over Air India in January 2022.

Boeing has placed an order for 190 B737 MAX, 20 B787, and 10 B777 aircraft. There are 40 A350 and 210 A320 family aircraft in the Airbus order. Wide-body aircraft like the A350, B777, and B787 have larger fuel tanks.

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