Former comptroller and auditor general (CAG) Vinod Rai has made more damning revelations about Air India's plight under former Civil Aviation Minister Praful Patel's regime.
In an exclusive interview to The Times of India, Rai has said that Air India sold Boeing 777 aircraft to Etihad at one-fifth the original price, thus incurring a huge loss.
The new disclosure comes just days after he alleged in an interview to Times Now that Patel “nudged” Air India’s board to increase its order for planes from 28 to 68, causing it to sink under debts. (Read our editor R Jagannathan's piece on how Air India's decline here.)
Rai told ToI today that Air India was pushed to purchase these aircraft by the then civil aviation minister, Praful Patel, who wanted the airline to have direct flights from India to the US and Canada. The move, in turn, became a huge financial burden for AI.
"Everybody was aware that such a purchase would create a financial crisis for AI. When any purchase has a debt proportion of 97%, there's no way it can be commercially profitable. Within 5 years of the 777s purchased by AI, they had to be sold to Etihad, 5 for the price of 1.We bought one aircraft at one price and sold it at one fifth of that price," Rai has told the newspaper.
13/09/14 PTI/First Post
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In an exclusive interview to The Times of India, Rai has said that Air India sold Boeing 777 aircraft to Etihad at one-fifth the original price, thus incurring a huge loss.
The new disclosure comes just days after he alleged in an interview to Times Now that Patel “nudged” Air India’s board to increase its order for planes from 28 to 68, causing it to sink under debts. (Read our editor R Jagannathan's piece on how Air India's decline here.)
Rai told ToI today that Air India was pushed to purchase these aircraft by the then civil aviation minister, Praful Patel, who wanted the airline to have direct flights from India to the US and Canada. The move, in turn, became a huge financial burden for AI.
"Everybody was aware that such a purchase would create a financial crisis for AI. When any purchase has a debt proportion of 97%, there's no way it can be commercially profitable. Within 5 years of the 777s purchased by AI, they had to be sold to Etihad, 5 for the price of 1.We bought one aircraft at one price and sold it at one fifth of that price," Rai has told the newspaper.
13/09/14 PTI/First Post
