Aviation

Air India’s fleet acquisition under scrutiny

DELHI

Controversy continues to swirl in India over whether excessive spending by Air India on a fleet acquisition order in 2006 has led to its present financial difficulties. The clamor follows a book by former Comptroller Auditor General (CAG) Vinod Rai titled The Diary of the Nation’s Conscience Keeper-Not Just an Accountant. The CAG acts as an independent authority established by the constitution of India to audit the expenditures of the government of India and its corporations.

“An airline with revenues of $1.2 billion was asked to take on a debt of $8.2 billion [including pre-existing debt],” said Rai during a recent television interview. He credited former aviation minister Praful Patel for having ‘nudged’ Air India to increase the Boeing order from the original 28 to 68 denied the allegation. The government has given the airline a $5 billion equity infusion until 2021.

Air India’s order consisted of 111 aircraft—43 Airbus A320 family jets and 68 Boeings, including eight 777-200LR, fifteen 777-300ERs, eighteen 737-800 and 27 787-8s.

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