AI cancels Boeing acquisition, puts claim of $ 710 million
National carrier Air India, struggling in a financial crisis, has cancelled the ordered acquisition of five Boeing 777 aircraft and also slapped a claim of $ 710 million on the commercial aircraft maker for its failure to deliver 27 B-787s, report Manish Tiwari & Samiran Saha.india Updated: Jul 31, 2009 01:30 IST
National carrier Air India -- struggling to cope with the present financial crisis -- has cancelled the acquisition of five Boeing 777 aircrafts and also put a claim of $ 710 million on the plane-maker for its failure to deliver 27 B-787 aircrafts.
"The cancellation orders have already been issued by my engineering department," Air India CMD Arvind Jadhav told the Hindustan Times on Thursday.
<b1>Boeing, he said, failed to deliver its B-787 aircrafts ordered by the airline causing huge business losses to the company. "The entire schedule of AI has gone haywire. We have put a claim of $ 710 million for their failure to deliver the aircrafts to us in time," the Air India chief said.
Boeing is the world’s second largest commercial aircraft maker.
The company, however, will be going ahead with its acquisition of the remaining Airbus planes. Jadhav said: "The delivery of the remaining three Airbus would be coming. We need them to run the future service as send out some old aircraft to reduce our liability."
As per the plan, some of the old aircraft will soon be phased out to reduce the company's liability, the CMD added.
A Boeing spokesperson, when contacted, said: "We are not aware of any cancellations from Air India."
Air India had ordered a 68 Boeing aircraft for India’s international carrier Air India while the two airlines were not merged.
Of these five B 777 aircraft are being cancelled keeping the low passenger load and the huge interest burden that the airline is facing because of the financial crisis the airline is in.
The list price of a single such aircraft varies from $165 million to $200 million. However Air India had negotiated for a low price because of the huge order that the airline has placed with Boeing.