Abu Dhabi-based Etihad Airways has agreed to purchase five Boeing 777 class aircraft from Air India as part of its strategy to continue international route expansion.
The ‘Boeing 777-200 LRs-2’ would be used on the airline’s new route between Abu Dhabi and Los Angeles which starts on June 1, 2014, Etihad said in a press statement.
Though both sides were tight lipped about the deal size, analysts said that Air India could get anywhere between $300 million and $350 million through the sale.
“We are looking forward to starting direct services to Los Angeles, as well as increasing our flying to South America. This is the aircraft to do that,” said James Hogan, President and Chief Executive Officer of Etihad Airways.
The Boeing 777-200 LR, of which less than 60 were manufactured, has a design range of 17,370 km. It would enable Etihad to connect any city in the world from Abu Dhabi, the statement said.
The AI 777 fleet is said to be, on an average, 6-8 years old. The two carriers signed a Letter of Intent (LOI) in Mumbai earlier this week paving the way for the deal.
The deal is a big relief for Air India as it has been looking to sell these planes for long time now, said Kapil Kaul, Chief Executive Officer-South Asia at the Centre for Asia Pacific Aviation (CAPA), an advisory and research firm focused on aviation.
“These aircraft were a big financial drain on Air India and post the deal the remaining fleet will be more aligned to its network and strategy,” said Kaul.
Subject to approvals, the aircraft will be delivered to Etihad Airways starting 2014. They will be re-fitted in a three class cabin configuration consistent with similar aircraft in the Etihad Airways fleet. The first Etihad aircraft is expected to enter service by April 2014.
Etihad’s current fleet would stand at 87 by the year-end; it has taken 14 new deliveries this year.