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Air India has finalised a deal to sell its five wide-body Boeing 777 aircraft to Etihad Airways by signing an agreement with the Abu Dhabi-based carrier, airline sources said today.

Top Air India officials signed a formalising agreement with their Etihad counterparts in Abu Dhabi earlier this week, they said, adding that the deal would be implemented after the Indian government’s approval, which is expected soon.

The two airlines had signed a Letter of Intent in October for an undisclosed amount, which was later approved by the national carrier’s Board. The sale of these fuel-guzzler planes was part of Air India’s turnaround plan.

The wide-body Boeing 777-200 LR (Long Range) planes, having an average age of six years, are likely be delivered to Etihad by around March next year, the sources said.     Etihad has already announced plans to deploy them on long-haul routes like Abu Dhabi-Los Angeles from June next year.

Air India, saddled under huge debt, had put eight of these aircraft for sale, but as there were no takers earlier, it had to issue the tender twice.

The Gulf carrier made the first-ever investment in an Indian carrier after the change in FDI policy was announced by the government by striking a Rs 2,058 crore deal to buy 24 per cent stake in Jet Airways as part of a strategic alliance to expand their global network.

"The Boeing 777-200 LR is a fantastic addition, giving us extra reach immediately and complementing our long term fleet strategy. We are looking forward to starting direct services to Los Angeles, as well as increasing our flying to South America. This is the aircraft to do that," James Hogan, President and CEO of Etihad Airways had earlier said.

Each of these planes would be re-fitted in a three-class configuration consistent with Etihad’s fleet. The purchase comes as Etihad finalises a new fleet order to meet its organic growth and expansion requirements till 2025.

Etihad currently flies to New York, Chicago, Washington and Toronto in North America, and to Sao Paulo in Brazil, and has ambitious plans to add new services to both continents.

The Boeing 777-200 LRs have a design range of 17,370 km, that could allow Etihad to connect almost any city in the world from its Abu Dhabi hub.