American aircraft manufacturer Boeing Company has offered an interim compensation of $45 million in cash to Air India on account of delay in delivery of the B787 Dreamliner.
The compensation is mere a 5% of the $900 million the state-owned carrier had demanded from the Seattle-based company. An airline source said Boeing has offered $10 million in credit over and above the cash part. Air India has communicated the Boeing proposal to the government.
?The issue is between the airline and Boeing. Air India has communicated to us about the compensation Boeing has offered. Our view is that Air India should not settle for interim compensation. After three years of delay, Boeing is offering just?a total of $55 million leaving the issue for unending negotiations,? a top aviation ministry official told FE.
Boeing did not respond to an emailed query by FE on the quantum of interim compensation for Air India.
As part of its fleet acquisition plan, Air India had placed order to buy 27 B787 the delivery of which had to begin during the last quarter of 2008. After almost three years of delay Boeing has now said it would deliver the jet to Air India in the October-December quarter of 2011.?Air India has accumulated a total loss of about R19,000 crore as on March 2011. Its fleet acquisition worth nearly R50,000 crore on a low equity base of R45 crore has added to its woes and the Comptroller and Auditor General (CAG) has raised questions on its decision to buy aircraft on this scale. ?As per the contract, Air India is entitled for a compensation of $145 million and there should not be dispute on this,? aviation ministry sources said.?A section of the ministry officials are of the view that Air India should cancel the order given its poor financial health.
?It would not be a wise decision on part of Air India. The airline is getting the B787 on the contracted price of $90 million. The current price of the aircraft in the international market is close to $130 million,? said another official in the ministry.
Meanwhile, Air India has decided to deploy the Dreamliner on short and medium-haul routes and is deciding on international sectors it could deploy them. The airline is expected to take delivery of four Dreamliners by the end of the current year.