New Delhi - India’s federal investigation agency will probe
a decade-old deal by the national carriers to acquire 111 aircraft, which
saddled the flag carrier Air India with losses, the Central Bureau of
Investigation said.
The CBI, as the federal police is known, registered three
cases and one preliminary inquiry in the light of orders from the Supreme Court
in January, according to the statement dated May 29 on its website. The cases
include investigating allegations regarding buying planes for 700 billion rupees
($10.8 billion), the CBI said. The acquisition allegedly caused a financial
loss to the “already stressed” national carrier, it said.
Air India spokesman Dhananjay Kumar and a spokeswoman for
Boeing in India declined to comment. Praful Patel, who was India’s civil
aviation minister at the time of the purchases, and an Airbus spokesman in
India didn’t immediately respond to phone calls seeking comment.
In December 2005, India’s cabinet gave an approval to the
national carrier to buy 68 aircraft from Boeing In 2006, state-owned Indian
Airlines Ltd. inked an agreement to buy 43 planes from Airbus SE. While the
aircraft orders were made separately, the two national carriers were later
merged by 2007 into the National Aviation of India Ltd., which operated under
the brand Air India.
Allegations
The CBI said it’s also investigating allegations of leasing
of a large number of aircraft “without due consideration.” Also part of the
probe will be allegations about giving up profit-making routes by Air India in favour
of national and international private airlines, which caused a “huge loss” to
the national carrier, it said.
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Air India’s aircraft deal was controversial at the time of
the purchase itself. A day after the Mumbai-based carrier chose to buy 23
Boeing 777 aircraft and 27 Dreamliners, Nigel Harwood, Airbus’s then vice
president of sales for India, said in an interview that the European company
wasn’t given a “fair chance.” Air India denied that, saying it took “strong
exception” to the claims.
India is considering selling a majority stake in Air India
to a strategic partner after a $3.6 billion bailout failed to turn around the
loss making national carrier, Bloomberg News reported in February, citing
people with knowledge of the matter. The proposal includes reviving Air India
within five years of selling a 51 percent stake, they said.