Air India finalises $840 mn compensation package from Boeing

Air India finalises $840 mn compensation package from Boeing

Mumbai: State-run Air India is finalising a $840-million compensation package, which the airline is seeking from US aircraft maker Boeing for the inordinate delay in the delivery of Boeing 787 Dreamliners.

The package would be a mix of both discount in services and cash, a senior official said here.

“Compensation is a mix of different services discount and money, " Air India chief operating officer, capt Gustav Baldauf, told PTI here.

The package is being finalised, Baldauf said.

Earlier, Air India chairman and managing director Arvind Jadhav confirmed to PTI that the airline had sought $840-million from Boeing for the delay.

Air India had ordered 27 Dreamliners, but Boeing failed to supply those planes by the scheduled time.

Air India had placed orders for 111 aircraft at an investment of over 13-billion with Airbus and Boeing in 2006 to replace its ageing fleet and leased planes.

The supply of Dreamliners was a part of these orders.

As per the original delivery schedule, Boeing was to start deliveries of these planes from September 2008.

However, it failed to meet the timeline due to issues with its vendors and industrial dispute with the workers.

The company has now rescheduled the delivery to second quarter of 2011.

Last year, Jadhav had told a Parliamentary Panel that Boeing had agreed to pay $145-million as compensation against $710-million worked out by the national air- carrier.

Air India Board in its last meeting on 18 November had reportedly rejected an offer from Boeing on compensation.