Air India has narrowed the bidding process down to three parties on its request for proposals for sale and leaseback financing on seven Boeing 787s, market sources indicate.
AerCap and FLY Leasing are among the final three candidates, say financiers. The other unidentified party is also believed to be an operating lessor, sources say.
A decision is expected by 15 March.
According to a financier, which bid on the RFP, "line numbers 54, 60, 65 and 72 should be easier to finance than line numbers 29, 35 and 46" as line numbers up to about 52 could have "weight problems" and "suffer from range, payload and fuel issues."
The source adds: "This could make the residual values at year 10 tricky, so some banks will barely go above $70 million on the debt portion advance."
According to DVB's managing director of aviation research, Bert van Leeuwen, the finance world seems to be taking a "wait and see" attitude regarding the 787 with the expectation that Boeing will come up with a final solution "very soon".
"I assume financing may temporarily be put on hold for pure asset-based deals and less so for more credit-based transactions, or those deal with better credit airlines," he says.
However, if the 787 investigation "drags on for months", and no clear definitive solution is found, financing the aircraft "may become a more serious problem."
"I suspect that Boeing will eventually come with a real solution, and not just a box to contain the effects of the failure, but this may require a redesign of the batteries or parts of the electrical system. Hopefully, this won't result in a weight increase and performance penalties. If so, this would make the early production aircraft, or any plane with the current electrical system, less desirable for financiers."
The aircraft in Air India's 12-year RFP are manufacturer's serial numbers 36276, 36277, 36278, 36281, 36282, 36283 and 36284. According to Flightglobal's Ascend Online database, six units are already in the fleet and one aircraft has yet to be delivered from Boeing.
Air India, AerCap and FLY Leasing were unavailable for comment.