Govt may pay Rs 800 cr for VVIP operations to Air India

The Government may consider paying Air India around Rs 800 crore as dues for operating flights for VVIP operations, official sources said on Tuesday.

The national carrier had billed an amount of about Rs 1,200 crore for keeping a dedicated fleet of five Boeing 747-400 for VVIP operations and the Ministry of Civil Aviation has recommended the bill to be made for about Rs 800 crore.

The airline's billing includes the cost of maintaining these five planes at around Rs 850 crore, the capital expenditure including that for standby aircraft at around Rs 200 crore and cash cost of about Rs 150 crore.

The issue was discussed at a meeting of the Committee of Secretaries (CoS) headed by the Cabinet Secretary, Mr A.K. Seth. A final decision on the payment will be made at the Group of Ministers (GoM) meeting to be held on July 18.

Sources in Air India have indicated that in the last five years around 50 flights were operated for VVIP operations due to which the aircraft were withdrawn from commercial service for around 300 days.

The airline also put forward to the CoS that it lost around $15 million per aircraft for Boeing 747 stating that if the Boeing 747-400s were sold in 2009 it would have fetched them around $30 million each.

Air India now plans to dispose of the gas-guzzling aircraft as they are no longer viable for commercial operations.

Meanwhile, the Government is considering using four Embraer jets and two Boeing Business Jets maintained by the Indian Air Force for its VVIP operations depending on the range of flight and the size of delegations.

The GoM is likely to meet early next week to take a final view on the entire gamut of problems and issues facing Air India, sources said.