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Boeing delivers first 787 to Air India

By Dominic Gates, The Seattle Times –

SEATTLE — Boeing has finally turned over the first of three 787s to Air India at its North Charleston, S.C., assembly complex, the company said Thursday.

The airplane was built in Everett, Wash., but flown to South Carolina for delivery.

Boeing had this particular Dreamliner ready to hand over to the customer weeks ago, and it has two more sitting ready in North Charleston when Air India is ready to take them. But delivery was delayed for months as the Indian government failed to give final approval for the purchase.

Air India has been beset by labor strikes and huge losses and had earlier wrangled with Boeing over compensation for the long production delay in delivering the airplane as well as potential performance shortfalls. The airline ordered 27 Dreamliners in 2005.

Last year, it issued a formal request for loans to complete the purchase of the first seven Dreamliners, pegging the real cost of each at $110 million. (The current list price of a 787-8 is $207 million.)

Because it is short of cash, Air India plans to sell the planes to a lessor and then lease them back, paying monthly.

Air India initially asked Boeing for up to $1 billion in compensation for the production delays that resulted in delivery nearly four years later than originally planned.

Boeing rejected that amount but did reach an undisclosed settlement on the delay compensation.

In addition, the early 787 models off the assembly line are heavily reworked and overweight and may fall short of the promised 20 percent fuel-efficiency improvement over the Dreamliner’s predecessor, the 767.

A report last month in India’s Economic Times quoted an unnamed senior official in India’s civil-aviation ministry saying that additional compensation of up to $80,000 per plane has been agreed with Boeing for any performance shortfalls in service.

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