Air India will lease out two Boeing 747-400s and five of its Boeing 777s, as the loss-making government carrier is devising ways to tide over a grave financial crisis.

The airline's board met in the national capital on Tuesday, and decided to go in for sale and leaseback of Boeing 787 Dreamliners, due for delivery next month.

 Also, the airline chose to serve only snacks instead of hot meals on flights less than 90 minutes.

It also approved the carrier's accounts for 2011.

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Air India posted a pre-tax loss of Rs 6,850 crore (Rs 68.5 billion) last year.

With a working capital and long-term debt of Rs 42,000 crore (Rs 420 billion), Air India is awaiting government nod for a debt restructuring and turnaround plan.

Induction of the Boeing 787 also hangs in the balance, as it requires government approval.

"We can expect Rs 300 crore ($60 million) annually by leasing out both Boeing 777s and Boeing 747-400," a senior executive said.

"Rationalising of on-board catering will lead to a saving of Rs 20 crore (Rs 200 million) a year."

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Air India chairman Rohit Nandan said the company would initiate the bid process for sale and leaseback of Boeing 787.
"On operating fronts, we have done well in last six months. Our yields and loads have increased. The future performance depends on fuel prices and approval of financial restructuring plan," he added.

A voluntary retirement scheme for employees would be considered after finalisation of the restructuring plan.

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Air India will also withdraw one of the two Delhi-London flights in February and auction its slot at Heathrow airport for a premium.

 "We have eight Boeing 777-LRs. We intend to lease out five," Nandan said. "Currently, some of them are flying on short-haul routes to Gulf. We are not making profits on these routes."

Air India has five Boeing 747-400s that are used for VVIP flights and on Riyadh and Jeddah routes.

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An airline official said the Boeing 747-400 can be leased even now, but the lease of Boeing 777 would start only after the induction upon induction of Boeing 787 Dreamliners.

An agency report from Washington said US airlines sought to block $3.4 billion in pending taxpayer-backed loan guarantees for Air India to buy Boeing Co jetliners.

The Air Transport Association, the leading US trade group for major carriers, sought an injunction in US District Court for the District of Columbia to stop financing arranged by America's Export-Import Bank.