Air India defends the sale of Boeing 777 planes to Etihad


Defending itself against the criticism of the Comptroller and Auditor General (CAG), Air India has defended the sale of five Boeing 777-200 LR planes to Etihad, saying it was the best option to check loss and reduce debt.

The CAG has criticised Air India for selling the aircraft below its indicative market price, under-reporting its losses and poor initiatives to monetise its real estate.

Air India inducted eight Boeing 777-200 Long Range aircraft in 2005 to serve the US with non-stop flights but the operations turned loss-making because the airline was unable to generate the expected loads and yields. In 2014 Air India sold five of the planes to Etihad for $336.5 million ($67.3 million per aircraft). While the CAG has rapped the airline for selling the aircraft at a loss, Air India has said the benchmark of the sale price was not available at the time of the transaction.

“There are very few operators of Boeing 777-200LR and no sale of aircraft had taken place in the secondary market. Thus, the benchmark of the sale price was not available. Even in the reports of valuers, it was apparent that the market price of $86-92 million per aircraft was indicative in nature,” said Air India’s Advisor (Finance) S Venkat.

Till date, Boeing has sold only 59 Boeing 777-200LR planes and globally these are flown by only 12 airlines. In contrast, 777-300ER variant has been successful and Boeing has sold over 800 units of the type.

 

Market demand and lease rates for the Boeing 200-LR aircraft have been declining with the induction of newer fuel efficient planes. Air India itself had to call for bids at least thrice with tenders attracting a single bidder on two occasions.

 

Read More…

 

Credit By : Business Standard.com

You may also read!

Cargo Flights Resume Between Afghanistan And India

After a 17-day delay, the fifth cargo flight carrying over 80 tons of fresh fruit left Afghanistan’s Hamid Karzai

Read More...

India To Buy $75 Million Ukrainian Engines For Russia Made Frigates

After Crimea fallout, Russia and Ukraine suspended all defense ties which rendered the under-construction Admiral Grigorovich class frigates of

Read More...

Barcelona Terror Attack: Spanish Police Kill 5 Suspects, Driver Still At Large

Police on Friday shot and killed five people wearing fake bomb belts who staged a car attack in a

Read More...

Leave a reply:

Your email address will not be published.

Mobile Sliding Menu