Dreamliner delay: AI compensated for just 180 days

This despite a three-year delay in delivery of 787 Dreamliner planes by US plane maker Boeing

Air India received compensation for only 180 days despite a three year delay in delivery of 787 Dreamliner planes by US plane maker Boeing. This is revealed in the  Parliament Public Accounts Committee report which was tabled today.

The Committee has recommend that immediate steps be initiated for claiming liquidated damages as per the contract and action should be taken to safeguard the interest of the Airline in terms of the contract and to avoid such a dereliction of duty in future.

Air India was to receive deliveries of 50 planes by October 2011 but till last September it received only 28 planes from Boeing. Delivery of three Boeing 777s was deferred. Boeing was to deliver 27 Boeing 787s from 2008-2011 and these will now be delivered by 2016.

The committee observed  that the purchase contract was loaded against Air India  and  despite the delay of more than three years in the delivery of these aircraft the purchase agreement provides for compensation only upto a maximum of 180 days. The amount of liquidated damages was to be calculated according to an approved formula on the basis of the  recent market price data. This amount was not to exceed an aggregate sum of 180 days per aircraft.

When asked about the liquidated damages, the Committee was informed  apprised that for an average daily lease rate of USD 30,000 per day, the maximum compensation payable will be $30,000 multiplied by 180 days and will work out to $5.4 million per aircraft.