Air India considers cancelling delivery of six Boeing aircraft

New Delhi: After coming under attack in Parliament over extravagant booking of aircraft, loss-hit Air India is now having second thoughts on acquisition of 111 aircraft — payments for which have added considerably to its financial woes — besides considering a proposal to cancel delivery of six Boeing aircraft, say sources.
The proposal, made at a recent Air India board meeting, is seen as an attempt to bring down the annual interest burden. These six Boeing aircraft, likely to be B777’s, are part of the total 68 Boeing aircraft ordered by the national carrier. The list price of a single such aircraft varies from $165 million to $200 million. However, the negotiated price for Air India could be much lower because of the huge size of the order.
A top airline official told The Indian Express that the airline was now trying to work out the ‘cost economics’ of cancellation of the order. “Since these are firm orders, there are likely to be huge penalties, and the airline has already made some advance payments for acquisition of these aircraft,” said the official.
30/07/09 Smita Aggarwal/Indian Express

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Categories: NACIL Jul 2009