The Government has given its nod to Air India to take delivery of the Boeing 787 aircraft.

An official statement issued after a meeting of the Cabinet Committee on Economic Affairs states that the airline be allowed to take delivery of the 27 Boeing 787 aircraft after signing the delay compensation settlement agreement with the manufacturer.

The meeting also decided that the issue relating to compensation for failure to meet performance guarantee be “delinked” from the delayed compensation settlement agreement. This will be negotiated separately by an Empowered Group of Officers. The Ministry of Law and Justice would examine and endorse the enabling legal provisions/aspects of the negotiations.

Sources indicated that at the moment Air India will only receive compensation for the over four-year delay in delivery of the aircraft. Sources also said that this is not the first time that an agreement for compensation for failure to meet performance guarantee has been reached between the Air India and an aircraft manufacturer.

“The performance compensation cannot be decided in advance. The performance can only be measured when the aircraft joins the fleet and more than one aircraft has flown on several routes for a period of time,” an aviation analyst said.

A final time schedule for Air India to start taking delivery of the aircraft is likely to emerge by Monday. “Air India will have to tie-up final financing with banks and have it released before the airline gets the aircraft. It will also have to physically transport crew to the US to take delivery,” a senior official said.

The delay in delivery was due to production delays and later due to agitation by sections of Air India pilots. Initially, Air India was to receive the first aircraft in 2008 but now the delivery is scheduled for sometime later this year.

Some pilots of erstwhile Air India were on strike for 58 days protesting the Government decision to allow pilots of erstwhile Indian to also train to fly the brand new aircraft.

ashwini.phadnis@thehindu.co.in

(This article was published on August 3, 2012)
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