India’s federal government likely will allow cash-strapped Air India to acquire 27 Boeing 787s and three Boeing 777-300ERs after the U.S. Export-Import Bank (Exim Bank) decided to provide $1.3 billion in loan guarantees supporting Boeing commercial aircraft sales to the state-run carrier.

A panel of federal ministers, headed by finance minister Pranab Mukherjee, is slated to meet on Oct. 22 to decide on the 787 purchase. Recently, India’s governmental auditing agency criticized the carrier’s fleet acquisition process, which took an “unduly long time” and contributed to the airline’s massive debt liability. The Air India board on Sept. 15 left the final purchase decision to the government. But with the U.S. Exim Bank’s decision, the panel of ministers will decide on the financial feasibility of the 787 purchase, a senior government official says.

“The government will ensure that Air India has the financial capability to pay for the aircraft on its own and not depend on it financially in the future,” the official adds.

Aviation minister Vayalar Ravi said recently the carrier will not increase its debt burden by making the purchase.

The Exim Bank said in a statement after its board meeting on Sept. 30, “In addition to these final commitments, the board also approved a $2.1 billion preliminary commitment to support future deliveries of Boeing aircraft to Air India. Upon approval of the conversion of the preliminary commitment into a final commitment, the transactions in total will support the export of 30 Boeing aircraft to the state-owned, national flag carrier of India.”

Air India spokesman K. Swaminathan tells Aviation Week “There is a turnaround plan pending with the government with regard to the size of fleet of Air India. The Group of Ministers will be meeting end of this month to discuss the purchase and loan before finalizing it.”

The latest estimate has Air India’s first 787 being delivered in December.

Ajay Lele, research fellow at the New Delhi-based Institute for Defense Studies and Analyses, says, ““The problems of Air India are known and need to be solved in a proactive manner by ways of pumping money and more investment in infrastructure to earn profits. An airline cannot run on an age-old fleet.”

The Indian government has injected a total of 25 billion rupees ($500 million) into the carrier in the last two fiscal years and has promised another 12 billion rupees through March 2012.

The 787s are part of a total of 111 aircraft ordered by Air India and the then-Indian Airlines from Boeing and Airbus. Air India ordered 68 from Boeing in December 2005, and Indian Airlines ordered 43 from Airbus in February 2006. Air India and Indian Airlines merged in 2007 to form Air India Ltd.