Boeing offers Air India $23 million for Dreamliner 787 glitches

Written by Mihir Mishra | New Delhi | Updated: Feb 12 2014, 15:48pm hrs
Air india DreamlinerAir India has faced teething troubles with the Boeing Dreamliner 787, which has scored low on fuel efficiency.
Boeing has offered pay national carrier Air India $23 million as compensation for the 787 Dreamliners not being as fuel efficient as promised, and for the losses on accounting of grounding the aircraft owing to technical problems.

Boeing's offer is half of the $46 million that Air India has sought. Negotiations between the two companies are currently underway.

Air India officials said that Boeings offer is not adequate. They have offered us but the negotiations are still on, said a senior official with the airline. In an email response, Boeing refused comment, saying, We do not comment on negotiations with our customers.

Air India has faced teething troubles with the 787. The planes have scored low on fuel efficiency and Air India had to ground its Dreamliner fleet for three months, as did other airlines globally, after battery meltdowns were reported on two planes.

The primary reason for the aircraft not being fuel efficient is its heavier weight.

The first few planes delivered to Air India was seven tonnes heavier than what was promised by Boeing, which is why the planes failed to achieve the promised fuel efficiency. This issue, however, has been rectified in the newer planes that are being inducted into Air Indias fleet.

Air Indias Dreamliners have also experienced a series of malfuctions since its debut in 2011. These include windshield cracks, overheating of ovens on-board, and the planes fuselage falling off.

According to official data, as many as 136 technical glitches were recorded in the aircraft between September 2012 and November 2013.

Air India is banking heavily on the Dreamliner for its turnaround plan, where it expects to become cash positive by FY17. The airline claims to have reduced cash losses on international routes where it replaced existing aircraft with the Dreamliner.

Currently, the aircraft is being operated on routes to London, Birmingham, Frankfurt, Paris, Hong Kong, Seoul, Tokyo, Osaka, Sydney, Melbourne and Shanghai.

Air India plans to induct 14 Boeing 787 Dreamliners by the March-end and 13 more would join the fleet by 2016. The airline had ordered 27 Boeing 787s in 2005, but Boeing could not deliver them in time. Deliveries began only in 2011.

Boeing compensated Air India for the delay but a Parliamentary committee report said that the airline was compensated for only 180 days despite the three year delay in delivery.