Will Air India buy more Boeing 787 Dreamliners?

Panel of its and govt officials to scrutinise operational record and decide whether to proceed with inducting more Boeing 787s.

Air India would constitute a committee to evaluate the performance of the 14 Boeing 787 Dreamliners it is set to add to its fleet by the end of the current financial year, before taking a final decision on induction of the remaining 13 aircraft on order for delivery by 2016.

A committee comprising senior officials from AI, the ministry of civil aviation, the ministry of law and the ministry of finance would do the audit, assisted by executives with technical expertise. This is the first time the airline would be conducting a performance evaluation of aircraft in service before deciding on induction of additional ones.

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A senior AI executive said, “There were certain performance and operational guarantees specified in the purchase agreement. The review committee will assess if the parameters specified match the actual functioning.” In the event of slippage, AI can either seek compensation from Boeing or reconsider induction of additional Dreamliners.

“For instance, in the purchase agreement, Boeing had specified the Dreamliners are at least 17 per cent more fuel-efficient than comparable aircraft. If the fuel efficiency of the 787s in operation over a one-year period is found lower than promised, we can look at seeking compensation. If there are some major slippages in operational guarantees, we can consider selling the aircraft,” the executive explained. 

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However, he added it was unlikely the review committee would decide to sell the 13 aircraft scheduled for delivery, as the airline had started making money on most of the routes where it has put the Dreamliner.

The turnaround plan of the loss-making government carrier, in fact, largely banks on the medium-haul Dreamliners, as the plane is said to be 20 per cent more fuel-efficient, and on a better alignment of routes with aircraft capacity – bigger aircraft for busy routes and smaller ones for lesser routes.

AI has 11 Dreamliners and it has put these on routes to London, Birmingham, Frankfurt, Paris, Hong Kong, Seoul, Osaka and Sydney-Melbourne. AI also uses Dreamliners for flights to Kolkata, Chennai and Bangalore.

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The results of the realignment have started to come in. “We were not meeting cash costs in 69 per cent of our network a year before. This has reduced to 25 per cent. While there would be flights in which we would not be able to generate operational profits, we are looking at meeting cash costs on 85 per cent of our network by the end of this financial year,” said another senior executive.

He said the losses were due to a mismatch between the aircraft deployed and demand on the route. 

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An instance is Delhi-Japan, being serviced by a Boeing 777 and requiring AI to have a 95 per cent passenger load factor or occupancy to make the route profitable.

Having a Dreamliner on the Delhi-Osaka route would allow AI to break-even if the load factor was as low as 75 per cent.

However, a series of technical glitches in the 787s – cracks on windshields, over-heating of ovens on-board, fuselage falling off - have raised concern. According to official data, as many as 136 technical glitches were recorded in the aircraft between September 2012 and November 2013. However, none of these led to any safety issues