Airline has
sought $800 million from Boeing
New Delhi, May
28:
The issue of
how much compensation Air India should seek from the US-based aircraft
manufacturer, Boeing, has been referred to the Government.
The airline is
entitled to compensation as the delivery of the aircraft has been delayed by
four years eight months.
The decision to
refer the matter was taken at the airline board meeting which was held here on
Monday.
Sources
declined to quantify the amount being sought on grounds of confidentiality
clause in a commercial agreement.
Interestingly,
deposing before a Parliamentary committee, the airlines former Chairman and
Managing Director, Mr Arvind Jadhav, had said, “We have slapped a compensation
claim of $710 million. Obviously, they have confirmed $145 million they will
pay as compensation for the delay and so we have tried to push the entire
delivery.”
The
Parliamentary report was made public in March 2010. In August 2010, official
sources told Business Line that Air India has already written to Boeing
seeking almost $800 million in compensation for the delay in delivery of the B
787.
The airline has
also sought $40 million that it has paid as pre-delivery payment for some of
the aircraft.
The list price
of the Boeing 787 is about $190 million although what an individual airline
pays varies.
Air India has
ordered 27 Boeing 787 aircraft.
On the issue of
whether Air India will be able to take delivery of the first 787 aircraft till
the compensation amount is fixed, sources indicated that technically all issues
should be firmed up before the delivery papers are signed by an airline.
Air India is
expected to take delivery of the first aircraft at the end of this month or
early next.
The
compensation amount to be paid is decided after taking into account the delay
and the amount of revenue that the airline would have generated if the new
aircraft had joined the fleet.
Air India, like
other global airlines seeking compensation from Boeing for the delay in
delivery of the new aircraft, will not get the compensation fund in hand.
Instead the compensation amount will be adjusted against future deliveries that
have to be made to the airline.
Delivery hitch The decision to refer the matter to the Govt was taken at
today's board meeting Air India's ex-CMD had told a House panel that it sought
$710 million as compensation The list price of the Boeing 787 is about $190
million Air India has ordered 27 Boeing 787 aircraft
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