The inability of the Civil Aviation Ministry and cash strapped Air India to take a decision on the issue of compensation from Boeing for delays in production and delivery of Dreamliners 787 has stalled the arrival of new jetliners

The inability of the Civil Aviation Ministry and cash strapped Air India to take a decision on the issue of compensation from Boeing for delays in production and delivery of Dreamliners 787 has stalled the arrival of new jetliners which stand parked braced in Indian colours at the Boeing facility in US.

Although the Dreamliners were ready for delivery in May this year and were supposed to be formally handed over to Air India by first week of June, the continued spat between Boeing and Air India over the compensation issue has left the state-of-the-art aircrafts gathering dust in the hangers of Boeing facility.

Air India had ordered 27 fuel-efficient B-787 Dreamliners in 2005 and the first delivery was to commence from 2008. However, due to various reasons including labour unrest, the delivery was delayed by over four years. Since then, both sides have been trying hard to work out a compensatory package and pave way for delivery of aircraft.

"Air India has already forwarded the decision of the Board to the Civil Aviation Ministry. The matter is presently under consideration in the Finance Ministry. A cabinet note has also been moved on the issue and a final decision is expected soon. The compensation package has to be cleared by the Cabinet Committee on Economic Affairs (CCEA)," a senior Aviation Ministry official remarked.

Recently, Boeing Asia Pacific and India, vice president, sales and marketing, Dinesh Keskar told Reuters that three Dreamliners were ready for delivery and are parked at Charleston, South Carolina. "We’re just waiting for Air India to receive those."

The continued delay in taking delivery of the aircraft could further create financial constraints as globally the final sale price of an aircraft is decided on the first of every month after taking into account escalation in terms of depreciation and related factors.

In fact, the Dreamliner was put on show at the Hyderabad air show in March this year. Air India will be the third airline after All Nippon Airways and Japan Airlines to receive this new generation aircraft. The new air carrier can carry between 210 to 250 passengers on routes of 14,200 to 15,200 km.

RELATED NEWS

Take measures to cut cost, Ajit tells Air India September 12, 2012