Air India gets approval for taking delivery of Dreamliners

The Union Cabinet on Friday approved a proposal by the civil aviation ministry allowing Air India to take delivery of 27 Boeing 787 Dreamliners from the American manufacturer, enabling the cash-strapped and loss-making carrier to launch flights to new international destinations.

''For delivery of Boeing, the issue relating to compensation for failure to meet performance guarantees has been delinked from the delay compensation settlement agreement, which shall be negotiated separately by an empowered group of officers after actual evaluation of the performance of the delivered or inducted B-787 aircraft,'' said a government statement after the cabinet meeting.

The cabinet committee on economic affairs allowed the airline to take delivery of the aircraft after signing the delay compensation settlement agreement with Boeing, but the issue relating to compensation for failure to meet performance guarantee would be delinked from the agreement. The empowered group of officers would negotiate directly with the aircraft manufacturer.

The order for 27 Dreamliners – described as next generation, fuel-efficient aircraft made out of composite materials – was part of the $8.1 billion order for 68 Boeing aircraft placed by Air India in 2005. The Dreamliners were to have been delivered by Boeing between September 2008 and October 2011, but were delayed following the surfacing of problems related to design and production.

Boeing has agreed to pay a compensation to Air India – estimated to be in the region of half a billion dollars – for the delays. The aircraft, each costing nearly $200 million, are now scheduled to be delivered between June and March 2016.

While Air India plans to deploy the aircraft on long-distance international flights, it will initially be flown on the domestic routes. Air India pilots flying on international routes went on a 58-day strike recently, protesting against the management's decision to train pilots of the erstwhile Indian Airlines – the domestic carrier that was merged with Air India – on the new aircraft.