Air India to refuse 787 delivery amid compensation row

written by australianaviation.com.au | May 30, 2012
Air India has threatened to refuse delivery of its first 787, seen here late last month during its unveiling at Boeing's South Carolina plant. (Boeing)

Air India will refuse to take delivery of any 787 Dreamliners until Boeing agrees to a compensation deal for a three-year delay on the aircraft, an Indian government minister said yesterday.

The announcement throws into question the state-run airline’s plans to take delivery of its first 787 this month. The money-losing carrier has ordered 27 of the fuel efficient jets, which were initially scheduled to begin delivery in 2008.

“We will have to decide on a compensation mechanism before taking delivery,” Indian Civil Aviation Minister Ajit Singh told reporters in New Delhi on Tuesday, Agence France-Presse reported. Singh declined to specify the amount the state-run airline would seek.

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The two sides are believed to be far apart on the terms of a deal, with Indian officials having said the carrier may seek as much as $1 billion in compensation for the delay. Two years ago Air India told the country’s parliament that it wanted $710 million in compensation while Boeing was offering $145 million.

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