July 27, 2012
The Indian government is a step closer to clearing the delivery of Air India’s Boeing 787s after a group of Indian lawmakers approved a compensation package sought by state-run Air India from the U.S. airframer for a four-year delay in deliveries.
Civil Aviation Minister Ajit Singh formally announced that the package has been approved, although he refused to disclose specific details. “Air India had negotiated a compensation package with Boeing because the aircraft were to be delivered in 2008. The earlier agreement was for a delay of six months and a certain amount was agreed upon. That has been enhanced now,” Singh noted.
Air India has previously said it expects to receive a compensation package worth as much as $1 billion from Boeing. That compensation could come in the form of a deduction from the total cost of the 27 787s ordered by the national carrier and in discounts on future orders, a Civil Aviation Ministry official says.
The compensation deal will now be discussed at a meeting of Cabinet Committee on Economic Affairs for “final approval,” Singh said, although he offered no details on when that meeting will be held.
Boeing Senior VP for Sales, Asia Pacific and India Dinesh Keskar, tells Aviation Week that the manufacturer will not discuss the compensation package in public, and notes that the deal being considered by lawmakers was one proposed by the company in May and approved by Air India’s board of directors.
“We look forward to delivering the three airplanes that are ready for Air India,” added Keskar. A fourth 787 destined for Air India also has rolled off the production line and is being prepared for delivery, he noted.
787 photo: Boeing