Clearing the decks for possible delivery of the state-of-the-art Dreamliner 787, a Group of Ministers (GoM) on Wednesday approved the compensation package to be sought by Air India from Boeing for the four-year delay in delivery of the aircraft.
Although there was no word on the amount of compensation that has been finalised by the GoM, on the grounds of confidentiality of the agreement between Air India and Boeing, Civil Aviation Minister Ajit Singh told journalists after a meeting that the matter would be taken to the Cabinet Committee on Economic Affairs (CCEA) for approval whenever it met next. The GoM is headed by Home Minister P. Chidambaram.
However, informed sources said a meeting of the CCEA was likely to be held on Thursday.
Air India had negotiated a compensation package with Boeing because the planes 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,” Mr. Singh said. The Dreamliners have been ready for delivery since the last two months and were parked at the Boeing facility in the U.S.
The GoM discussed the terms of compensation and the amount to be paid by Boeing as per the latest agreement with Air India, which was approved by Air India Board on May 28. Deposing before a parliamentary committee, then Air India chairman 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.” The report of the parliamentary committee was made public in March 2010.
The airline placed orders to buy 27 B-787s in 2005 and, as per the original schedule the aircraft manufacturer had to commence delivery from September 2008. Delivery was delayed owing to various factors, including labour trouble in Boeing and delays in getting parts from foreign suppliers.