Air India sold its five Boeing planes to Etihad Airways at a “significantly” lower cost than the “indicative” market price of the aircraft, CAG said in a report tabled in Parliament today.
The government-owned Air India sold these five Boeing 777-200 LR planes to the Gulf carrier Etihad for USD 336.5 million (USD 67.3 million per plane) in 2013 against USD 86-92 million per aircraft obtained from two parties –M/s AVITAS and ASCENT, the Comptroller and Auditor General (CAG) observed in its report ‘Turnaround Plan and Financial Restructuring plan of Air India Ltd’ (AIL).In its latest report on the airline, the CAG also observed that AIL incurred a book loss of Rs 671.07 crore on the sale of these planes and payment of Rs 324.67 crore towards interest on loans availed for procurement of these aircraft.
The aircraft were delivered to Etihad Airways during the period from January 2014 to April 2014.
According to the CAG, two parties –Etihad Airways of UAE and German Aviation Capital, Frankfurt — responded to open tender floated by Air India in May 2013.
“The offer of Etihad for a sum of USD 336.5 million for five aircraft (Rs 2071 crore) was highest and was approved by Board (October 2013),” it said. Audit observed that the price (of USD 67.3 million per B-777-200 LR aircraft) at which the five aircraft were sold to Etihad Airways was significantly lower than the indicative market price of USD 86-92 million per aircraft obtained by the company from two parties, M/s AVITAS and M/s ASCENT before initiating the sale process,” the CAG report stated.
According to the CAG, after opening the financial bid, Air India obtained another valuation of the aircraft from Aviation Specialist Gr ..