Air India Seeks Nearly $1bn compensation from Boeing for Delay

Air India has sought almost billon dollars as compensation from Boeing for delays in delivering 27 Boeing 787. As per reports, Boeing has already agreed to pay half of that amount to the airline popular for its flights to India.

State-owned Air India has asked Boeing Co. to pay nearly a billon dollar as compensation for delay of more than 3 years in delivering the airline’s 2005 order of as many as 50 long range Boeing aircrafts including 27 Dreamliners.

According to a senior civil aviation ministry official the company has already agreed to cough up 500 million dollars.

“We are negotiating for enhanced compensation,” the official said.

India’s national airline is likely to take the delivery of its first Dreamliner in May 2012 and as per the ministry official the compensation could well go up in case there is more delay. The official said Boeing is still to procure the necessary certifications mandatory for the 787 engines from US regulators.

“The compensation would go up further, if Boeing delays it again,” he was quoted in several Indian news reports.

The official also added that the Indian government is yet to hear from Boeing about the increased compensation demand.

Boeing 787 Dreamliner is widely touted as the world’s most fuel efficient aircraft and Air India, one of the principal options among international travel buffs booking flights to India, had ordered a delivery of 27 Dreamliners.

However, Boeing’s Dreamliner project has been deferred by over three years owing to technical hitches in developing the aircraft.

With Dreamliner in its fleet, AI can not only hope to bring down its escalating fuel cost but can also delight the long haul travellers by offering them cheap tickets on flights to India.

Boeing 787 will be displayed at the Indian Aviation Show 2012, which kicks off today in Hyderabad. This will be the first time the aircraft will be showcased in the country. Industry big names like Airbus, Bombardier, Dassault, Embrear, Gulfstream, Hawker Beechcraft, Piaggio Aero, UAC-Sukhoi, IRKUT-Berieve will also be a part of the show at Hyderabad.