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Atul Patankar

Air India leased defective aircraft

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Atul Patankar

As reported by Saurabh Sinha & Himanshi Dhawan at timesofindia.indiatimes.com on 4 October 2009

 

NEW DELHI: Thanks to Right to Information, shocking instances of mismanagement over the years are now coming to light that show how Air India's Maharaja has now been reduced to a pauper. A query filed by RTI activist S C Agrawal has led to confirmation of what was till now a whisper - expensive aircraft lease (rent) deals being made by the airline with these agreements favouring rental companies and not AI.

 

The airline has admitted to renting at least two aircraft that did not prove to be airworthy or safe to fly and then losing over $29 million while terminating the lease agreement prematurely.

 

This particular case dates back to 1996 when AI took two aircraft from West Indian company Caribjet. One of the aircraft, an Airbus A-310, developed technical snags time and again. The situation came such a point that the Directorate General of Civil Aviation (DGCA) had to ask AI to stop using that aircraft. In its reply, AI has given a letter written by DGCA to the airline in September 1996 about the aircraft (VT-LEJ, the A-310) which says: "The aircraft is having repeat nature of defects despite maintenance action... AI should consider not to utilise the said aircraft as (its) airworthiness/safety of operation cannot be ensured (sic)."

 

This aircraft had a host of problems. On two occasions, it had to return to land soon after taking off. It got delayed at Heathrow for days due to a problem in the cargo door and defects in fuel quantity indicator. After the DGCA warning, AI wrote to Caribjet about early termination of leases of this aircraft and another one hired from the same company (VT-LEK). By doing so, reveals the RTI reply filed by the airline, AI had to pay a whopping $23.6 million to Caribjet and an additional $6 million as interest!

 

While AI has owned up to one costly error, questions on its lease policy are still being raised. Three years back, the AI-IA combine placed orders for 111 new aircraft, including the yet-to-fly Boeing Dreamliner 787. The massive shortage of aircraft during the times of the aviation boom ” that was busted by last year's global recession and Indian slowdown ” led AI to take many aircraft on lease from foreign companies. But since there were no pilots to fly them, the planes remained idle at Indian airports while the Maharaja continued shelling out money to the companies.

 

Source: Air India leased defective aircraft - India Business - Business - NEWS - The Times of India

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