Govt mulls cancelling Air India's 787 Dreamliner orders

New Delhi: Faced with daily embarrassments over myriad issues, such as pilot strikes, defaults on salaries and dues to service providers, and even as a mountain of debt continues to grow, the ministry of civil aviation maybe mulling cancellation of orders made by state-owned Air India under the stewardship of erstwhile minister, Praful Patel.

Merged entity Air India is still to take delivery of 27 Boeing 787 Dreamliners, which were a part of a huge order of 111 new planes worth Rs55,000 crore placed during the UPA government's previous term of 2004-09.

Delivery of these aircraft is already delayed by three years and the first lot are expected to be delivered to Air India sometime in the third quarter of this year.

Industry sources put AI's loss for 2010-11 at Rs7,000 crore, which will take accumulated losses for the carrier to around Rs21,000 crore. This total, added to working capital and aircraft acquisition loans and vendor dues of Rs4,500 crore, brings total liability to a mammoth Rs60,000 crore.

AI incurs monthly losses of Rs400-450 crore, even as its daily income just about covers the fuel bill.

Acquisition of 27 Dreamliners will push liabilities to a staggering Rs90,000 crore.

While antagonisms between AI management and pilots has brought working relationships within the organisation to an all-time low, the management is also being blamed for failing to come up with a credible restructuring plan.