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Air India To Seek 787 Delay Compensation  
User currently offlineEI321 From Iraq, joined Jul 2009, 0 posts, RR: 0
Posted (6 years 8 months 3 weeks 2 days 17 hours ago) and read 3934 times:



Quote:
Air India is seeking compensation from the US-based aircraft manufacturer Boeing for the five-month delay in delivery of the Boeing 787 aircraft to the airline.

“Boeing has informed us that our delivery schedule have now been moved from September 2008 to February 2009.

“Air India will seek compensation although the exact details are yet to be finalised. By 2010, the delivery schedule for our Boeing 787 aircraft would be back to what has been decided in 2005,” the airline’s Chairman and Managing Director, Mr V. Thulasidas, told Business Line.


http://www.thehindubusinessline.com/...12/28/stories/2007122851621000.htm

Interesting. Does anybody know much the aircraft must be delayed by before compensation is required? Are other airlines looking at this?

14 replies: All unread, jump to last
 
User currently offlineTdscanuck From Canada, joined Jan 2006, 12709 posts, RR: 79
Reply 1, posted (6 years 8 months 3 weeks 2 days 17 hours ago) and read 3912 times:



Quoting EI321 (Thread starter):
Interesting. Does anybody know much the aircraft must be delayed by before compensation is required? Are other airlines looking at this?

It's in the contracts. I would strongly suspect that it varies from airline to airline since that's just one variable in a very complex negotiation. Getting a copy of an airline sales contract is close to requiring an act of god, so I wouldn't expect this is something we can answer definitively.

Any airline that has it in their contract (and has pushed past the slack that was probably written in) is probably considering it.

Tom.


User currently onlineStitch From United States of America, joined Jul 2005, 31007 posts, RR: 86
Reply 2, posted (6 years 8 months 3 weeks 2 days 17 hours ago) and read 3889 times:
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Be interesting if Boeing can use the payments as a sweetener to land AI as a 747-8I customer...

User currently offlineEI321 From Iraq, joined Jul 2009, 0 posts, RR: 0
Reply 3, posted (6 years 8 months 3 weeks 2 days 17 hours ago) and read 3875 times:



Quoting Stitch (Reply 2):
Be interesting if Boeing can use the payments as a sweetener to land AI as a 747-8I customer...

It seems to be a tactic that Airbus used, but I would expect most airlines to go for a deal on additional 787s rather than 747s.


User currently onlineStitch From United States of America, joined Jul 2005, 31007 posts, RR: 86
Reply 4, posted (6 years 8 months 3 weeks 2 days 17 hours ago) and read 3830 times:
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Quoting EI321 (Reply 3):
It seems to be a tactic that Airbus used, but I would expect most airlines to go for a deal on additional 787s rather than 747s.

True, but AI has a replacement VLA RFP coming up.


User currently offlineIkramerica From United States of America, joined May 2005, 21532 posts, RR: 59
Reply 5, posted (6 years 8 months 3 weeks 2 days 17 hours ago) and read 3811 times:

I doubt AI has much to stand on here. It is very likely a public show to make them look frugal in the eyes of the press and the people. It's similar to the way they always think they deserve the lowest price ever paid for every aircraft, and make big stinks after deals are announced to please the government overseers and busybodies.

They may be contractually obligated to pay slightly less to Boeing due to a 3-6 month delay in delivery of any one plane, which means the first few may fall under that provision, but this would have been pre-negotiated and there should be no extra-contractual negotiation for additional compensation in the real world. But this isn't the real world, it's India.  Wink



Of all the things to worry about... the Wookie has no pants.
User currently onlineStitch From United States of America, joined Jul 2005, 31007 posts, RR: 86
Reply 6, posted (6 years 8 months 3 weeks 2 days 17 hours ago) and read 3793 times:
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Plus we don't know how Boeing wrote the terms, especially for orders like AI which were signed after Boeing knew there were problems and things might not go as smoothly as planned.

It may very well be a relative pittance. I highly doubt it will be tens of percent of the purchase price.

QF supposedly only got ~$14 million an A388, and that was with a two-year delay. And even then, they just used that ~$170 million (for their original 12) to help cover the down payment on another 8.


User currently offlineVxg From United States of America, joined May 2004, 102 posts, RR: 0
Reply 7, posted (6 years 8 months 3 weeks 2 days 14 hours ago) and read 3644 times:

I've got to ask - does Air India have to pay Boeing compensation if it delays taking delivery of the planes? Let's say for example they hold up for a potential upcoming livery change or perhaps they want to change the seats/interior before taking delivery?  Smile.

VxG


User currently offlineLeftWing From Singapore, joined Mar 2006, 284 posts, RR: 0
Reply 8, posted (6 years 8 months 3 weeks 2 days 14 hours ago) and read 3619 times:



Quoting Ikramerica (Reply 5):
It is very likely a public show to make them look frugal in the eyes of the press and the people.

you hit the nail on the head !..... soften the public before they place another billion $ order to Boeing and Airbus....


User currently onlineStitch From United States of America, joined Jul 2005, 31007 posts, RR: 86
Reply 9, posted (6 years 8 months 3 weeks 2 days 14 hours ago) and read 3575 times:
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Quoting Vxg (Reply 7):
I've got to ask - does Air India have to pay Boeing compensation if it delays taking delivery of the planes?

Well AI did sit on their 77Ws and 77Ls for months, so perhaps Boeing charged them rent at PAE and now AI is asking for some back for the 787 delays to help pay those bills.  Smile


User currently offlineRedFlyer From United States of America, joined Feb 2005, 4331 posts, RR: 28
Reply 10, posted (6 years 8 months 3 weeks 2 days 13 hours ago) and read 3535 times:



Quoting Tdscanuck (Reply 1):
Getting a copy of an airline sales contract is close to requiring an act of god, so I wouldn't expect this is something we can answer definitively.

Wouldn't you just love to get your hands on a copy of one (better yet, two from two different airlines)??

Quoting EI321 (Reply 3):
Quoting Stitch (Reply 2):
Be interesting if Boeing can use the payments as a sweetener to land AI as a 747-8I customer...

It seems to be a tactic that Airbus used, but I would expect most airlines to go for a deal on additional 787s rather than 747s.

We're only talking a delay of a few months, assuming it doesn't get delayed much more. Whatever Boeing may have to pay them in penalties will be a pittance compared to what Airbus had to pay for a minimum 18 - 24 month delay. As Stitch points out, above, QF managed to get a $14M payment per A380. I doubt Boeing's delay will amount to much more than a fraction of that. Also, I'm not familiar with what routes they plan to put the 787 on, so the penalties may vary depending on if the 787 is going to be used for expansion purposes or replacement of older aircraft. The former would, IMO, exact a steeper penalty than the latter.



My other home is a Piper Cherokee 180C
User currently offlineRedFlyer From United States of America, joined Feb 2005, 4331 posts, RR: 28
Reply 11, posted (6 years 8 months 3 weeks 2 days 13 hours ago) and read 3535 times:

Duplicate post.

Filler...

Filler...

[Edited 2008-01-04 20:03:11]


My other home is a Piper Cherokee 180C
User currently offlineHAWK21M From India, joined Jan 2001, 31684 posts, RR: 56
Reply 12, posted (6 years 8 months 3 weeks 2 days 9 hours ago) and read 3403 times:

Its called Pressure  Smile
regds
MEL



Think of the brighter side!
User currently offlineTdscanuck From Canada, joined Jan 2006, 12709 posts, RR: 79
Reply 13, posted (6 years 8 months 3 weeks ago) and read 3162 times:



Quoting RedFlyer (Reply 10):
Quoting Tdscanuck (Reply 1):
Getting a copy of an airline sales contract is close to requiring an act of god, so I wouldn't expect this is something we can answer definitively.

Wouldn't you just love to get your hands on a copy of one (better yet, two from two different airlines)??

Indeed I would...unfortunately, mere possession of such would probably get me fired.

Tom.


User currently offlineGr8Circle From Canada, joined Dec 2005, 3107 posts, RR: 4
Reply 14, posted (6 years 8 months 2 weeks 6 days 20 hours ago) and read 2981 times:



Quoting Ikramerica (Reply 5):
But this isn't the real world, it's India.

What a weird statement! If there is a "compensation for delayed delivery" clause in the contract, AI is within their rights to demand compensation....what's it got to do with India???

Quoting Vxg (Reply 7):
I've got to ask - does Air India have to pay Boeing compensation if it delays taking delivery of the planes? Let's

Again, contracts being contracts, I'm sure Boeing would have been covered in some way or the other for delayed deliveries resulting from the airline's side.....and be sure that they would have received whatever compensation was due, either in the way of rent or in the way of interest on pending payments, etc.....


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