Air India finalises USD 840mn compensation package from Boeing

The package would be a mix of both discount in services and cash, a senior official said here.

"Compensation is a mix of different services discount and money, " Air India Chief Operating Officer, Capt Gustav Baldauf, told PTI here.

The package is being finalised, Baldauf said.

Earlier, Air India Chairman and Managing Director Arvind Jadhav confirmed to PTI that the airline had sought USD 840-million from Boeing for the delay.

Air India had ordered 27 Dreamliners, but Boeing failed to supply those planes by the scheduled time.

Air India had placed orders for 111 aircraft at an investment of over 13-billion with Airbus and Boeing in 2006 to replace its ageing fleet and leased planes.

The supply of Dreamliners was a part of these orders.

As per the original delivery schedule, Boeing was to start deliveries of these planes from September 2008.

However, it failed to meet the timeline due to issues with its vendors and industrial dispute with the workers.

The Company has now rescheduled the delivery to second quarter of 2011.

Last year, Jadhav had told a Parliamentary Panel that Boeing had agreed to pay USD 145-million as compensation against USD 710-million worked out by the national air- carrier.

Air India Board in its last meeting on November 18 had reportedly rejected an offer from Boeing on compensation.