NEW DELHI — National carrier Air India will sell and leaseback five more of its new Boeing 787 aircraft as part of its efforts to reduce costs and raise funds to re-finance the acquisition of the aircraft.

The loss-making airline is hoping to raise around $600 million during the current financial year through the sale to clear off the bridge loans taken against these aircraft.

On July 3, Air India issued a tender inviting bids for the sale and lease back of five Boeing 787 aircraft, which were delivered between August 26 last year and January 28 this year, according to the bid document reviewed by Aviation Week.

The airline has fixed a reserve purchase price of $116 million for an aircraft. It will sell the five aircraft and immediately lease them back for a period of 12 years, with a possibility to extend the lease, the document says.

The sale transaction will allow the airline to continue using the asset without owning it. All potential bidders will have to respond by Oct. 31, according to the bid document.

State-run Air India, which has been running losses since 2007, is counting on the sale and leaseback process to partly pay off its debt and liabilities. So far, the airline has completed sale and leaseback on seven Boeing-787 aircraft in its fleet.

The debt-ridden airline posted a net loss of 51 billion rupees [$845 million] in the last financial year ending March 31, 2013 and currently has a debt burden of over 400 billion rupees [$6.7billion].

In February, India’s federal government announced a fund infusion of 55 billion rupees [$911 million] for current financial year.  But the airline has failed to recover from its financial losses.

In April, it secured a $200 million loan from public sector lender Bank of India to make pre-delivery payments for the purchase of three Boeing 787 aircraft. The airline is also planning to rent out its additional property across the country and proposed a reduction in allowances for all sections of employees, including the pilots, to augment revenues.

Air India ordered 27 aircraft out of which 14 are currently operational in its fleet, as of June. 

The company hopes to take delivery of 20 aircraft by end of March next year.