Debt-ridden national carrier does not have the funds to pay for the 27 it has ordered, Civil Aviation Minister Vayalar Ravi said Sept. 9, a day after the country’s nodal public auditing agency flayed the state-run airline’s hasty expansion plans.
“The decision to acquire a large number of aircraft was risky and has contributed predominantly to the airline's massive debt liability,” the comptroller and auditor general (CAG) said in a report sent to parliament on Sept. 8. The fleet acquisition process also took an “unduly long time,” the CAG said (Aviation Daily, Sept. 9).
Ravi, in reacting to this report, says that the delivery of the 27 aircraft had been delayed by Boeing for three years. He did not specify whether the order would be confirmed or canceled, but made clear that if these aircraft were delivered, there is no money to pay for them.
“I don’t have the money to pay ... I cannot beg the finance minister all the time for the money. It is difficult. This is the position now. The government cannot say we are confirming or we are rejecting,” the minister said in an interview on a local news channel. The delivery of the first Boeing 787 to Air India is reported to have been further delayed by two months to December.
The CAG report tabled in parliament last week takes the Civil Aviation Ministry to task for a faulty and hasty expansion plan that involved funding the purchase of new planes with debt or loans, calling it a “recipe for disaster.” The CAG said this led the airline to its current financially crippled state. To a suggestion by the CAG that Air India be left alone by the government to have a chance for survival, Ravi says the ministry will intervene to look at profitability, admitting that it is currently difficult to meet payroll. “This is the situation, that is the interference. You must understand our problem,” he said.