Air India to seek compensation from Boeing

While AI had sought $700 million-$ 800 million as compensation for the over three-year-delay, Boeing said earlier that it wasn't writing anyone a $500 million cheque.

The author has posted comments on this articleSaurabh Sinha, TNN | Aug 6, 2012, 08.57PM IST NEW DELHI: Air India's long wait for the Boeing 787 Dreamliner could end soon now. The cabinet committee on economic affairs last week cleared the undisclosed amount compensation package offered by Boeing to AI for the over three-year-delay in delivery of the aircraft.

Now once US authorities finish their probe into an engine mishap on one of the AI Dreamliners there, the airline will start getting the 27 dreamliners ordered by it unless some modifications are suggested by the probe which may take time to carry out.
"There has been a substantial increase in 787 weight from what we ordered and what is actually ready. This will have an impact on fuel consumption. AI will fly the planes for 18 months and based on the actual fuel consumption and the one promised on the lighter 787s the airline ordered, a separate compensation will be sought from Boeing," said sources.
In fact, one of the biggest factors that weighed in favour of the 787 was its fuel efficiency that was to have come from the aircraft's low weight is it is made of composite material. So AI had ordered 27 Dreamliners but now with the final product's weight being more than what it was proposed to be at the time of placing order, the government has asked AI to take compensation for the same on this count too.

While AI had sought $700 million-$ 800 million as compensation for the over three-year-delay, Boeing said earlier that it wasn't writing anyone a $500 million cheque. So the actual compensation is now learnt to be much lower than what AI sought.

"The benefit that Boeing says AI is getting is on two counts -- one will be monetary compensation due to delayed delivery and second the fact Dreamliner's price has gone up substantially from the time when AI placed order as one of the launch customers. However, the second logic does not appeal to us much," said highly placed sources.

Source: http://timesofindia.feedsportal.com/fy/8at2Etb0ciqSZ2tT/story01.htm

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