Air India is planning to cut down its order for Boeing 787 Dreamliners to 12 from its original 27-jet order announced in 2005, according to sources familiar with the subject.

The cancellation is a result of the airline’s financial losses, as it was incapable of buying all the aircraft worth nearly Rs200bn ($4bn).

The 12 planes will be acquired in phases over three years with the first plane due for delivery in December 2011.