AI Dreamliner delay: Govt freezes on compensation amount

New Delhi: A Group of Ministers (GoM) on Wednesday decided on the compensation amount Air India will seek from Boeing Co for the over three-year delay in delivering the Dreamliners, B787. Though no one is confirming this amount right now, last year the airline’s previous Chairman and MD Arvind Jadhav had spoken of an over $700 million claim.

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Initially, the delay was on account of production problems that Boeing faced but then the schedule kept getting stretched for one reason or another. At one point last year, the Air India board of directors had proposed that only 14 aircraft be finally bought from Boeing instead of the original order of 27 but now all aircraft on order will be taken.

The delay has not been only on Boeing’s side though; at least three B787s were ready months back but the government has not given a green signal to flying them into India due to the continued uncertainty over pilots - wide-body pilots affiliated to the Indian Pilots Guild have been unavailable for flying this new aircraft since 7 May.

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Civil Aviation Minister Ajit Singh said after the GoM that the compensation issue will now go to the Cabinet Committee on Economic Affairs (CCEA) for approval.

The Dreamliners are part of the same aircraft order which came under a scathing attack by the Comptroller & Auditor General (CAG) two years back. The CAG had ticked off the airline management for undue haste in ordering aircraft. But AI feels these aircraft are crucial for its turnaround since it currently lacks any medium-haul aircraft in its fleet.

Once the aircraft start arriving, the airline may reopen lucrative sectors such as Malaysia. Some years back, AI had 21 weekly services to Malaysia but had to shut down the flights because of non-availability of proper medium-haul aircraft. Besides Malaysia, it may also look to begin and augment services to other key markets such as Hong Kong, Osaka, Jakarta, Dubai and Frankfurt using the 787s.

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But with the majority of wide-body pilots still unavailable, how many new flights and destinations are opened up remains to be seen.