Air India’s “Where Is – As Is” Sale of Its Airbus A310s

Airlines around the world routinely sell aircraft they no longer need. Aircraft are sold due to age, fleet commonality, converted to freighters and some are just scrapped. As Air India modernizes its fleet and seeks additional liquid capital in the process it has arranged a somewhat unusual sale to be directly carried out by an airline.

Air India has announced the sale of three of its Airbus A310-304 aircraft, VT-EJG (Yamuna), VT-EJJ (Beas) and VT-EJK (Gomati). All these of these aircraft were built and delivered new to Air India 1986.

So what is unusual about Air India’s sale of these three aircraft? The aircraft are being sold “As Is – Where Is,” not generally how an airline sells its aircraft.  The aircraft are on a sale and lease-back agreement with British bank Investec Bank and Air India states that two of the aircraft are flight capable, but doesn’t explicitly state they are airworthy for passenger flight, while one of the aircraft is grounded Chatrapati Shivaji International Airport (BOM) in Mumbai. The Air India Airbus A310-304s have a range of 5,200 nautical miles, flies at Mach 0.80 (at least the ones that fly) and are configured for 201 passengers (20 in Executive Class and 181 in Economy Class).

Interested in purchasing your very own Airbus A310-304? All you need to do is put US$25,000 in a secure bank account then bid for the aircraft. 10% of the final price must be paid within 10 days of winning the bid with the final amount paid upon taking delivery of the aircraft.

Estimates for a well maintained Airbus A310 seem to average around US$6.5mil-US$7.5mil , so it’ll be interesting to see what these three A310s from Air India sell for … particularly the one that can’t be flown out of Mumbai.

Happy Flying!

Comments

  1. Steven–

    I’m curious–if airlines don’t usually sell their aircraft on an “as is, where is” basis, how do they sell them? With warranties?

    The Air India offering (http://mmd.airindia.co.in/aimmd/tender/MM_A310-300_PAX_2011_Sale.pdf) seems pretty routine. One aircraft is up against a C check and Air India didn’t want to spend the money to do the work, so the carrier parked it. The other two are in service (at least according to the tender) and are being flown until they are up against their C Checks.

    Any reasonable bidder will have the aircraft and their records inspected (as the tender invites), so there wouldn’t be any surprises, which seems to make as-is, where-is relatively benign.

    Perhaps I’m missing something…I know that you have worked for Air-India, so maybe I am.

    Keep up the consistent work!

    –MS

  2. MS,

    Firstoff, I have not worked for Air India, I just seem to end up writing about them more than other airlines.

    Airlines sell their planes, more often than not its through a third party agent. While that is not always the case, it is frequently the case. However, when an airline sells a plane they don’t use terms like that of a used car salesman. “As Is-Where Is” is usually broken up into “These two fly, this one doesn’t” and they are sold in a different manner.

    Happy Flying!

    -Fish

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