Air India wants Boeing 787 delay compensation before delivery

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Published: May 30, 2012

Air India will not take delivery of any Boeing 787 aircraft until a compensation amount for the delays of those aircraft is finalised.

The state-owned carrier’s board made the decision on Monday after a detailed discussion and has submitted its plan to the country’s civil aviation ministry for approval, says an Air India spokesman.

He declined to comment on the compensation amount the carrier is looking at, citing confidentiality on the matter.

“How long the delay will be depends on when the government makes a decision,” he adds.

The cash-strapped carrier was due to take delivery of its first 787 in early June.

Air India has 27 787s on order and was initially scheduled to receive the first aircraft in September 2008, although that was pushed back because of delays on the 787 programme.

Media reports in India estimate that the compensation amount will range between $ 145 million and $ 800 million. The country’s civil aviation minister Ajit Singh has also said that Air India will not take delivery of the aircraft until the airline and the manufacturer decide on the compensation package, the reports add.

Meanwhile, the carrier has fired 101 pilots who have gone on strike because of an ongoing labour dispute. These pilots, previously with Indian Airlines before it merged with Air India in 2007, were protesting the carrier’s decision not to train them for the 787 aircraft.

The carrier will be cutting its international flights from 45 to 38 a day in June because of disruptions from the strike. Services to Hong Kong, Shanghai, Seoul and Japan will be cancelled, adds the spokesman.

Singh has since reiterated that the demands of the pilots will be considered “only if they report back to duty unconditionally”.

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