If there are commercial problems, Boeing will have to compensate:

If there are commercial problems, Boeing will have to compensate: Ajit Singh

Last Updated: Thu, Jan 17, 2013 20:11 hrs

On a day when the aviation regulator directed Air India to ground all six of its Dreamliners following the Federal Aviation Administration (FAA)’s worldwide advisory to ground B-787s, civil aviation minister Ajit Singh says the government will wait for the US regulator’s full report before taking further steps. In an interview with Disha Kanwar and Surajeet Das Gupta, the Union minister talks about Air India’s contract with Boeing and the implications of the latest development.

How serious is the grounding of Dreamliners and how you are going to tackle this issue?
At this point, there is not much clarity on the FAA’s advisory. We are waiting for the FAA report. As Dreamliner is made by a US manufacturer (Boeing), the US regulator should first give a clearance to the aircraft. Based on that, DGCA (Directorate General of Civil Aviation) will give its approval. Air India Dreamliners had some minor glitches, but those problems are not because of the battery (FAA has reportedly cited probles in the jet’s lithium batteries). FAA has to carry out some tests on whether the lithium battery is creating problems and Boeing also has to come up with tests. We can speculate at this time, but there is not much information. See, we were only flying to Dubai and Frankfurt and some local destinations, and we won’t give them permission to fly until DGCA gives them the clearance.

How India’s interests will be protected if this crisis continues for a longer period of time? Is there any compensation clause?
On the face of it, it does not look like a big problem. But in this business, there can be no tolerance even if there is a perception of safety problem. We can talk about it, but let’s wait and see. At this point, we are not clear about how serious the problem is, what are the commercial implications and how long will it take. If we say anything now, it would be speculation. As should first have some clarity from Boeing and FAA.

Does your contract have some compensation clause if the aircraft is grounded due to fault of Boeing?
I am not sure of each clause of it. But normally, we expect that if it causes any commercial problem, Boeing will have to compensate.

If Dreamliners are grounded for a long time, what is the contingency plan?
Let’s wait for the (FAA) report. Dreamliners are doing very well from an operational point of view. We got positive reports from the customers’ and financial angle. The domestic services of Dreamliners would be absorbed by the existing fleet of aircraft and flights to Dubai, Paris and Frankurt operated by these airplanes would now be serviced by Boeing 777s for the time being.

Are you worried of this as Air India’s turnaround plan is mainly hinged upon Dreamliners?
It will be too early to worry. We are waiting for the FAA report.

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