Air India seeks $1 bn from Boeing for delivery delays
11 Aug 2010
An irate Air India management has slapped a notice on American aircraft manufacturer major Boeing demanding compensation of about $1 billion (Rs4,600 crore) for the persistent delay in deliveries of planes.
AI had placed an order for 27 B-787 Dreamliners. According to the original schedule, the first such aircraft was to be delivered in September 2008 followed by one each in each of the subsequent months.
By March 2011, Boeing was scheduled to have delivered 18 of these premium aircraft to India's state-owned carrier. It now appears, however, that the first of these aircraft will arrive only in April next year, prompting the airline, already battling with a bleeding balance sheet, to slap a compensation notice to the Seattle based aviation giant, reports Hindustan Times.
The compensation sought comes to about half of the airline's accumulated loss.
Arvind Jadhav, chairman and managing director of the National Aviation Company of India Ltd, which controls Air India, did not respond to the paper's phone calls and text messages.
The compensation has been worked out based on computing of direct cost per day of delay and increased cost of operations using 25 old aircraft.
The issue was discussed by the NACIL board, which met in New Delhi last Saturday. A decision was taken to form a special management team to conduct negotiations with Boeing and to seek a compensation of between $710 million (about Rs3,266 crore) to $ 1 billion (Rs4,600 crore) instead of the $145.8 million (about Rs670 crore) being offered by it.
The Board also decided it would take up with the company the issue of doubling the compensation amount being paid every day from $15,000 (Rs6.9 lakh) to $30,000.