India wants compensation before Dreamliner delivery

Air India will not take delivery of any Boeing Dreamliner planes until the two sides agree on a compensation deal for a three-year delay in the multi-billion-dollar order, a minister said Tuesday.

"We will have to decide on a compensation mechanism before taking delivery," Civil Aviation Minister Ajit Singh told reporters in New Delhi, declining to specify the amount state-run Air India will seek from the US planemaker.

Two years ago, Air India told parliament it wanted compensation of $710 million for the delay while Boeing had offered $145 million but Indian officials have since said the sum sought by the airline may increase to near $1 billion.

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The civil aviation minister had earlier planned to visit the United States this month to take delivery of the first of the Dreamliners, which originally were due to be ready by late 2008 but were delayed by technical hitches.

Officials for Boeing in India were not responding to telephone calls.

Loss-making Air India has ordered 27 Dreamliner jets and has said it will lease some of the planes to leasing companies to raise cash.

Air India used to dominate India's skies but its market share has shrunk sharply in the face of fierce competition from private carriers.

The 27 Dreamliners are part of a total 111 planes ordered by Air India from Boeing and Airbus for $15 billion to rejuvenate its aging fleet.

Apart from the Dreamliners and three other Boeing planes, Air India has taken delivery of all the other aircraft in its 111-plane order

Air India has been posting massive losses since 2007 following its merger with the country's other national carrier, Indian Airlines, due to big wage costs for a bloated workforce and high fuel and debt costs.

The dispute with Boeing comes as several hundred Air India pilots remain on strike in a row over who should fly the Dreamliner.

The Air India pilots went on strike three weeks ago to protest against a decision to train former Indian Airlines pilots for the new planes.

© 2012 AFP

Source: AFP
Date: May 29, 2012