Boeing may not compensate AI

The cash-strapped Air India, looking for funds from the government to revive itself, is unlikely to get any compensation during the current financial year from US giant Boeing for delay in delivery of B787 Dreamliner aircraft. Air India had ordered 27 B787s and compensation for the delay in delivering the aircraft would have provided some relief of the financial front.
Contrary to popular belief that the Maharajah would be compensated automatically, it transpires that the B787 delay is an extra-ordinary delay and the standard compensation norms included in aircraft purchase agreements cover only delays of up to 90 days. Moreover, AI will get the compensation only at the time of delivery and this could mean a wait of up to early 2011.
According to highly-placed industry sources, the schedule for test flights of B787 is yet to be fixed and the first delivery of the new generation aircraft to Air India is not expected till 2011. Also, the quantum of compensation would have to be negotiated between the airline and Boeing. The national carrier as well as Boeing are tight-lipped about the terms of compensation since it revolves around sensitive commercial agreements.
06/11/09 G Ganapathy Subramaniam & Faizan Khan/Economic Times

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Categories: Foreign Nov 2009, NACIL Nov 2009