Air India cancels order, Indian airlines avoid shutdown
Air India has canceled an order for five Boeing 777s after delivery delays of another sequence of Boeing jets, the 787 Dreamliner, the Times of India reported over the weekend.
The state-run national carrier, facing close to $1 billion in losses this year, said it is filing a claim for $710 million against the plane manufacturer for the 787 delays. Air India ordered 27 of the new Boeing models, as well 23 777s and 18 737-800s in a massive order signed in 2006.
The 787 has been beset by delays and Air India chairman Arvind Jadhav said the postponement of deliveries has caused the airline to incur losses.
'The entire schedule of Air India has gone haywire,' he said.
Meanwhile, a coalition of 10 domestic airlines in India has called off a planned shutdown of commercial flights on Aug. 18. The airlines, which include international carriers Kingfisher and Jet Airways, but not Air India, threatened the one-day action to protest the Indian government's unwillingness to relax airport and jet fuel taxes.
The airlines project that the domestic industry will lose $2 billion this year and said the government isn't taking the losses seriously enough. However, after a public outcry over the weekend about what would happen to thousands of stranded passengers, the airlines relented and will operate. They said the government has also agreed to reopen talks about easing the fuel tax and airport fee burdens.
Taxes on jet fuel in India make it 60 percent to 70 percent more than other countries in the region, said the Center for Asia Pacific aviation. And the government has raised airport landing fees in recent years to offset the rising costs of overhauling some of the country's biggest and most dilapidated airports, including Delhi, Mumbai and Bangalore.