Air India leased defective aircraft

New Delhi: Thanks to Right to Information, shocking instances of mismanagement over the years are now coming to light that show how Air India's Maharaja has now been reduced to a pauper. A query filed by RTI activist S C Agrawal has led to confirmation of what was till now a whisper — expensive aircraft lease (rent) deals being made by the airline with these agreements favouring rental companies and not AI.
The airline has admitted to renting at least two aircraft that did not prove to be airworthy or safe to fly and then losing over $29 million while terminating the lease agreement prematurely.
This particular case dates back to 1996 when AI took two aircraft from West Indian company Caribjet. One of the aircraft, an Airbus A-310, developed technical snags time and again. The situation came such a point that the Directorate General of Civil Aviation (DGCA) had to ask AI to stop using that aircraft.
After the DGCA warning, AI wrote to Caribjet about early termination of leases of this aircraft and another one hired from the same company (VT-LEK). By doing so, reveals the RTI reply filed by the airline, AI had to pay a whopping $23.6 million to Caribjet and an additional $6 million as interest!
The massive shortage of aircraft during the times of the aviation boom — that was busted by last year's global recession and Indian slowdown — led AI to take many aircraft on lease from foreign companies. But since there were no pilots to fly them, the planes remained idle at Indian airports while the Maharaja continued shelling out money to the companies.
04/10/09 Saurabh Sinha & Himanshi Dhawan/Times of India

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Categories: Foreign Oct 2009, NACIL Oct 2009