Govt not keen on AI Boeing deal

India's national carrier Air India (AI) may not get the US-based Boeing 787 Dreamliner aircraft, as the government is reluctant to guarantee the loan AI wants to take to buy these modern planes.

Updated on: Oct 28, 2011, 24:27:34 IST

Hindustan Times | By Chetan Chauhan, New Delhi

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India's national carrier Air India (AI) may not get the US-based Boeing 787 Dreamliner aircraft, as the government is reluctant to guarantee the loan AI wants to take to buy these modern planes.

The civil aviation ministry is adverse to AI's proposal to buy 27 Dreamliners costing R18,000 crore, considering its grave financial health, which does not appear to be on a road to recovery in the near future.

AI had placed an order for 68 planes to Boeing in 2006, of which 27 where Dreamliners, and another 43 to France-based Airbus, which the Comptroller and Auditor General (CAG) in its September 2011 report termed as a major reason for AI's financial crises.

The new airplanes from the two companies have come except the Dreamliners, which are expected to land in India this December, after a three-year delay. By March 2011, Boeing was scheduled to have delivered 18 of these premium aircraft to AI.

Despite over 84 new aircraft, AI is in a debt of R42,570 crore and had accumulated a loss of R22,000 crore on March 31 this year. Its debt burden will cross R60,000 if the Dreamliners are bought.

The CAG report and the airline's financial health appear to be two major reasons for the ministry requesting a GoM to cancel the order, despite AI claiming that it would lead to huge litigation costs.

The ministry is reluctant to support AI's bid to get a loan from foreign banks for Dreamliners, saying the government would be paying a huge cost - R6,600 crore - to keep the national carrier afloat in this financial year.

The ministry, in its proposal to the GoM, had said that the additional financial burden of R18,000 crore to buy Dreamliners will plunge AI into further financial crises. "The Dreamliners will improve efficiency of AI and are a good replacement for the aging fleet," said an AI official, who believe that the deal can prove to be a turning point for AI.

Civil aviation minister Vyalar Ravi had questioned AI's capability to pay back the loan.

ABOUT THE AUTHOR
Chetan Chauhan
Chetan Chauhan is the National Affairs Editor looking into all aspects of news and features from across India. A Chevening scholar with over three decades of experience in reporting and news management, Chetan has extensively covered all important aspects of the social sector, political economy, environment and climate change nationally and internationally. He did a journalism course at the Reuters Institute of Journalism in Oxford and Digital Media training at Nanyang Technological University in Singapore. He started as a reporter with The Statesman in 1996 and joined the Hindustan Times in 2000 in the metro bureau covering environment, crime and Delhi politics. He covered hot local news, from the Jessica Lal murder case to the rebellion of Delhi Congress MLAs against then Chief Minister Sheila Dikshit, to the replacement of toxic vehicle fuel with cleaner compressed natural gas (CNG) in the national capital. Some of his stories on air pollution became part of the Supreme Court’s landmark MC Mehta versus Government of India case in the National Capital Region (NCR), forcing the government to take corrective measures. As part of the national political bureau since 2004, he covered important central sectors such as environment, education, social justice, labour, rural development, water resources, renewable energy, agriculture, broadcasting and the Planning Commission for more than a decade producing several exclusive and investigative breaking stories. His specialisation is the environment, having covered at least a dozen United Nations global conferences on climate change, biodiversity and wildlife including climate summits in Paris, Copenhagen and Bali. He also covered India’s two five-year plans ---11th and 12th and reported on drafting and execution of right based laws such as Right to Education, Right to Information and rural job guarantee law, MG-NREGA, now being introduced in new format as VG-RAM-G Act. He has in-depth knowledge of social sector issues. He was one of the first to report on tigers vanishing from Sariska and Panna wildlife reserves in 2004 and 2008, respectively, leading to the setting up of the National Tiger Conservation Authority (NTCA) and the introduction of stringent penal provisions for poaching. He has written extensively on the rising human-animal conflict in India and the degradation of India’s biodiversity hotspots because of mining and other activities. Since 2004, Chetan has covered Parliament comprehensively and participated in training on the nuanced coverage of Parliament proceedings. He has travelled extensively across India to cover national and provincial elections since 1998, especially in the Hindi heartland states, considered India’s road to power. He writes a regular column for Hindustan Times, Ecostani, on important national politics, economy, Himalayan ecology and environmental issues. His other responsibilities include providing inputs for edits and edit page articles for the publication, apart from managing news flow from across India.Read More

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