CBI is also probing whether Air India surrendered routes to private airlines, adding to its losses.
Highlights
- CBI registers a series of cases against Air India
- 111 planes bought in 2005 for $10.8 billion was problematic: CBI
- Air India surrendered profitable routes to private carriers: CBI
The CBI is investigating a decade-old deal which saw Air India and Indian Airlines acquiring 111 aircraft, saddling the national carriers with losses. The deal was approved by the cabinet of Prime Minister Manmohan Singh; the new inquiry adds to a list of scandals linked to his two successive terms in sectors including coal and telecom.
Civil Aviation Minister Ashok Gajapathi Raju said that his department will cooperate fully with the investigation. "Whatever knowledge we have, we will cooperate with them," the minister said, referring to the CBI.
The CBI yesterday registered three cases and one preliminary as ordered by the Supreme Court in January. The cases include investigating allegations regarding buying planes for 70,000 crores or $10.8 billion. The acquisition allegedly caused a financial loss to the "already stressed" national carrier, the investigating agency said.
Praful Patel, who was Civil Aviation minister at the time of the purchases, told NDTV, "All decisions were multi-tiered and collective. The aircraft purchase order was cleared by an EGOM headed by P Chidambaram and the merger was cleared by an EGOM (group of ministers) headed by Pranab Mukherjee. Both decisions were ratified by the cabinet." The 2007 merger of the two national carriers is part of the CBI's inquiry.
Jayant Sinha, the junior minister for aviation, said the CBI probe pertains to decisions taken by the previous government.
"Most experts are of the view that those decisions that were made with respect to fleet acquisition and merger significantly weakened Air India's competitive position," Mr Sinha said to NDTV.
In December 2005, the UPA cabinet approved for the national carrier to buy 68 aircraft from Boeing Co. A year later, Indian Airlines signed up for 43 planes from Airbus SE. The two national carriers were later merged in 2007 to operate under the brand Air India.
The CBI said it's also investigating allegations of aircraft being leased "without due consideration" and whether Air India surrendered profitable routes to private national and international private airlines, allegedly adding to its vast losses.
India is considering selling a majority stake in Air India to a strategic partner after a $3.6 billion bailout failed to turn around the loss making national carrier,
Bloomberg News reported in February, citing people with knowledge of the matter. The proposal includes reviving Air India within five years of selling a 51 percent stake, they said.