Boeing, Air India to sort out compensation issues arising from 787 Dreamliner delay

Mumbai: A high-level Boeing team will arrive this week in New Delhi to discuss outstanding issues, including compensation, with Indian flag carrier, Air India (AI). The discussions will take place in the backdrop of Boeing announcing a six-month delay to the prestigious 787 Dreamliner programme. This is the third delay announced by the aerospace giant for the first flight and initial deliveries of the futuristic aircraft.

The team, to be led by Dinesh Keskar, senior vice-president, sales, Boeing Commercial Airplanes, will discuss the revised schedule, which now visualise deliveries of the aircraft taking place in the last quarter of 2009.

The latest revision of the delivery schedule is expected to impact Air India's growth plans significantly, along with its bottom line. It is being given to understand that the carrier has begun the process of computing compensation details, which it will file with Boeing in the course of the scheduled talks.

AI officials have clarified that compensation issues are specified in the agreement.  However, they point out, Boeing will have to face up to changed circumstances that now prevail in the aviation industry, which might make the aircraft manufacturer liable for higher amounts than visualised in the agreement.

AI will not only have to reassess its fleet expansion plans, officials say, but also renew existing lease agreements. In the changed circumstances now prevailing in the industry, officials further point out, lease agreements are  becoming expensive and difficult to arrive at.

Under the circumstances, AI is bound to suffer a negative impact on its financials, officials say.