Air India has decided to go in for sale-and-leaseback option for Boeing 787 Dreamliners instead of their outright purchase.

This decision was taken a day after Air India's lenders approved its debt restructuring plan as its Board today in New Delhi reviewed the latest financial position of the cash-strapped company.

According to official sources, the Board, which reviewed Air India's operations and the implementation of its turnaround programme and Financial Restructuring Plan, also decided to lease out excess capacity of two Boeing 747-400 planes and some 777-200 LR aircraft after the Dreamliners were inducted.

As per AI's plans, the acquisition of 14 of the 27 Boeing 787 Dreamliners that will join its fleet by 2014, is likely to be made through sale-and-leaseback.

Sale-and-leaseback or leaseback in short is a financial transaction where one sells an asset and leases it back for the long-term. Hence, one is able to use the asset continuously but does not own it.