CCEA Decision; Delivery of Boeing 787 Approved

New Delhi, August 3, 2012: The Cabinet Committee on Economic Affairs has approved the proposal of Ministry of Civil Aviation as per following:

(i) Air India be allowed to take the delivery of 27 numbers of B-787 aircraft after signing the Delay Compensation Settlement Agreement.

(ii) 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/inducted B-787 aircraft. The Ministry of Law & Justice would examine and endorse the enabling legal provisions / aspects of the negotiations.

Air India would derive the benefits on account of the induction of the latest state-of-art technology Boeing aircraft which are more fuel efficient than its’ competitors.

Background:

Air India is planning to induct 27 numbers 787 aircrafts in its fleet as part of the contracted deliveries of the aircraft from M/s. Boeing. These aircrafts were scheduled to be delivered from September, 2008 to October 2011. However, due to certain design / production issues these aircraft have been delayed and are now scheduled to be delivered between June, 2012 to March, 2016.