Govt may approve next week compensation package from Boeing

Expecting Air India to induct the first three Boeing 787 Dreamliner aircraft this month, government is likely to approve next week a compensation package from the US aircraft manufacturer for an over three-year delay in delivery of the planes.

Air India Board has sent a proposal to the government on the compensation package after talking to Boeing. "It will be taken up by the CCEA (Cabinet Committee on Economic Affairs) whenever the next meeting is held," Civil Aviation Minister Ajit Singh told PTI here.

A meeting of the CCEA is likely to be held next week. The Minister said while the first three Dreamliners were expected to be delivered this month, five-six more of these planes would be delivered over the "next few months", taking the total to eight or nine this year.

Last month, Singh had made it clear that the aircraft could be delivered only after the compensation package was finalised.

While no official figure is forthcoming about the value of the compensation on grounds of confidentiality of negotiations, former AI CMD Arvind Jadhav had told a parliamentary panel in March 2010 that a claim of USD 710 million had been made.

Following this, several rounds of negotiations have been held between Boeing and Air India, including in the last two weeks, as official sources said this amount could vary now.

The compensation package would not mean Boeing writing a cheque for AI, but the most likely process would be to adjust the price with the delivery of each aircraft. As of last year, the list price of a B-787 was about USD 194 million.

Air India's Board had in late May finalised the issue of compensation, including the amount to be claimed and how. It had then forwarded its decision to the government for approval.

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