The Air India board has approved the sale of five Boeing 777-200 LRs to Abu Dhabi-based Etihad Airways. The transaction is likely to fetch around $350 million (Rs 2,100 crore) to the airline. The proposal will now require clearance from the union cabinet.

The delivery of aircraft to Etihad airways is scheduled to commence from January 2014. Air India owns a fleet of 20 Boeing 777 200-long range and Boeing 777 300-extreme range that are operated on the routes to the US, Europe, China, Japan, Korea and Saudi Arabia. Out of the 20, eight 200-LRs are flown to Seoul, Hong Kong, Tokyo and Osaka but operational profitability has been a concern. The accruals through sale would be utilised to settle outstanding loans against the aircraft.

The sale of the aircraft will also help improve Air India’s financial performance as these planes have high operating cost and the airline has been struggling to achieve break-even on routes, where it has deployed the aircraft.

Air India will deploy Boeing 777 300-ER to Newark, while Dreamliners will replace 777 200-LRs to Seoul, Hong Kong, Tokyo and Osaka.

Etihad Airways has said it plans to deploy the aircraft on a new route between Abu Dhabi and Los Angeles starting June 2014.