Air India wants cash compensation for 787 grounding: Source

State carrier Air India will seek compensation in cash from Boeing(BA.N) for losses caused by the grounding of its 787 Dreamliners, rather than discounts on future purchases, a senior government source said on Wednesday.

The statement increases pressure for cash compensation after a person familiar with the intentions of All Nippon Airways (9202.T) told Reuters earlier that it would prefer a direct refund, rather than future discounts.

"We will obviously ask for cash. We will negotiate once the planes start flying again," said the senior government source, who has direct knowledge of the situation.

"Air India will surely ask for compensation. There is no question about it."

Boeing's 50 Dreamliners in service have been grounded since mid-January following two incidents involving battery problems.

Air India has six of the $200 million jets and has ordered 21 more.

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