Air India's controversial 68 Boeing Aircraft is under Investigation

Air India's controversial 68 Boeing Aircraft is under Investigation

The civil Aviation Ministry has confirmed that Air India's controversial US $11 billion deal to buy 68 Boeing Aircraft in 2006 is being Investigated by the Central Bureau of Investigation (CBI).

The Aviation Ministry revealed this in a reply to a Right to Information application on October 31st but said that the files related to the Boeing deal cannot be made public as presently the case is under investigation by the CBI.

Former executive director at Air India, Jitender Bhargava had filed the RTI application seeking access to all the files related to the deal, which was criticised by the government auditor Comptroller and Auditor General of India.

CAG found fault with then Aviation Minister Praful Patel for not supporting the Airline, which has lurched from one crisis to another over the past few years and now finds itself in a debt crisis. The Airline was reportedly forced to buy Boeing Aircraft in a hurry,with the US $11-billion purchase made against an equity base of just US $34-million.
Since, the acquisition agreement in 2006, Air India's financial health has deteriorated steadily. Between 2002 and 2003, the airline posted a net profit loss of around US $10.2-million, which increased to more than US $1.1-billion between 2010 and 2011 after the Boeing acquisition and the establishment of new routes.

The then Aviation minister had reportedly pressured the Airline into establishing a loss making US India direct route, using the new Boeing planes, but the route never paid off for the Airline and incurred significant losses for several years.

The above sequence of events clearly demonstrates that the erstwhile Air India was advised to revisit its proposal by the Aviation Ministry into expanding its requirement of aircraft. Whilst their earlier proposal for 28 Aircraft had taken two years to prepare and submit, the revised long term fleet for 50 aircraft plan was completed in four months.

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Mohini Porwal [ B Sc]
Trainee News Editor
Indian Aviation News Editor