Compensation cash from Boeing could help AI tide over payments
21 February 2011
Flag carrier Air India is in negotiations with Boeing for compensation over delayed delivery of 787 Dreamliner aircraft, and will discuss matters in a meeting with a company representative on Monday. AI officials have said the matter assumes urgency as the cash-starved carrier faces problems even in meeting salary payments of its employees.
AI chairman and managing director Arvind Jadhav is scheduled to meet Boeing India chief Dinesh Keskar on Monday.
''There is no cash in the company. We have to borrow every month to even pay our salaries. A cash payment of compensation by Boeing would ease the situation for a while,'' reports quote an unnamed senior AI official as saying.
Both firms have been discussing compensation for delay of B787 Dreamliner planes at a leisurely pace and according to AI officials the amount owed to them is close to $840 million. The last notice served by AI officials was for an amount of $710 million, but with further delays the amount has now gone up.
Boeing has confirmed that AI is entitled for compensation but is yet to specify the amount.
AI had placed orders for 27 Boeing 787-800 Dreamliners with the Boeing Co in 2006 and under the original schedule, Boeing was to deliver the first Dreamliner in May 2008. However, the first deliveries are now expected only in the fourth quarter of 2011.
At its end the carrier borrows short-term funds on monthly basis to meet its working capital requirement, including payment of salaries and operational cost. So a settlement with Boeing assumes importance for AI.