Boeing urges AI to go for smaller aircraft

State-run carrier Air India is in a fix ahead of its plan to restructure its international operations by the yearend.
Struggling with massive losses, the carrier is looking to cancel or defer orders of three long-haul Boeing aircraft 777-ER (Extended Range) but the US plane maker Boeing insists it be replaced with narrow-bodied Boeing 737-800, generally used for domestic operations.
Also, the difference over pricing of Boeing 777-3-ER remains an issue as AI wants Boeing to offset these planes at a total of Rs 2,000 crore - the price that prevailed when the orders were placed in 2005.
"We are still in talks with the airline. We are yet to sign a new contract in this regard," Dinesh A. Keskar, president, Boeing India, told Mail Today.
Keskar hoped that the deal would be struck soon. The cash-strapped carrier had ordered for 111 aircraft in 2005, including 68 Boeing aircraft for Rs 55,000 crore. AI, which has a paid-up capital of just Rs 145 crore currently has a payment commitments of over Rs 22,000 crore for aircraft deliveries this year as against Rs 12,000 crore last year.
AI and Boeing have been negotiating to work out the deal for quite some time. But the former is yet to take a decision on Boeing's offer as it will have to approach the price negotiation committee, which functions under the Public Investment Board of the Union finance ministry for change in aircraft model.
07/06/10 Sanjay Singh/Mail Today/India Today

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Categories: Foreign Jun 2010, NACIL Jun 2010