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Boeing is bringing the 787 Dreamliner to India for the first time. ZA002 will arrive in Delhi on July 13th. It is scheduled to proceed to Mumbai, but Boeing officials refused to indicate their plans for Mumbai. It appears the plan as of now is for the aircraft to be in Mumbai on July 15th briefly and then return on a direct flight back to Paine Field at Everett in Washington state, USA, on the same day.
The mission of bringing the Dreamliner to India may be aimed at deflecting criticism of national carrier Air India’s decision to buy 27 of these next generation aircraft. In April and May, a report by the Comptroller and Auditor General of India, criticised a ministerial group for its decision to buy 50 aircraft (787s and 777s) from Boeing for Air India Ltd.
Earlier this year, the financially strapped carrier set up a panel to negotiate with Boeing a compensation package for delays in delivery, and to even consider the possibility of cancelling the order. The airline is demanding over $1 billion while Boeing is reportedly offering $500 million which includes $264 million as a notional compensation i.e. the diffence between the price at which Air India placed the order and current prices. Quite clearly this offer is not acceptable to the government, and this could be why Boeing is bringing the Dreamliner — to raise awareness of the aircraft to try and wow the government.
The procurement of the Dreamliner is a double-edged sword for Air India.
On the one hand, can the airline afford an additional $4 billion investment at a time when it is struggling to even pay salaries, let alone vendors, and much of its new Boeing 777 fleet is under-utilised?
On the other hand, with India having one of the highest prices for aviation fuel in the world, which makes fuel contribute up to 50% of an airline’s operating costs, the light-weight, best in class fuel efficient design of the Dreamliner, can help the carrier save money.
Plus let us not forget the draw of the new aircraft. Even today, operators of the Airbus A380 charge a premium for their flights on the superjumbo, and Air India will be one of the earliest Dreamliner operators with four of its aircraft (VT-ANA~VT-AND) almost ready for delivery. Passengers will surely want to fly the new plane.
As a romantic I would love to see the Dreamliner over the skies of India, as a realist, I fear the Dreamliner might just push Air India over the edge.
What are your thoughts? Cast your vote via a comment on whether Air India should persist with its procurement of the Dreamliner or abandon it?
