CAG initiates audit into distress sale of 5 Boeings by Air India at throwaway price

The Comptroller and Auditor General (CAG) of India has initiated an audit query into Air India's (AI) distress sale of five new Boeing 777s at a fraction of the cost at which they were purchased.

A senior official confirmed to Mail Today that the Mumbai office of the CAG had sent the query on the distress sale of the five aircraft to the AI management at its headquarters in Mumbai. The aviation ministry has also been sounded on the issue as it exercises administrative control over the national carrier, he added.

Aviation sector expert and former AI executive director Jeetendra Bhargava told Mail Today, "These Boeing 777 aircraft should not have been bought in the first place. Air India did not require them and it was a case of over-ordering."

Mail Today had broken two stories last April the distress sale of the five Boeings to Abhu Dhabi-based Etihad Airways at one-third of the listed price. Former CAG Vinod Rai's book, Not Just an Accountant: The Diary of the Nations Conscience Keeper, which had hit the stands last September had also stated that an enquiry into the issue was needed. The book refers to the two Mail Today stories-published on April 19 and April 30-about the Boeings, which were purchased for a staggering Rs 1,300 crore apiece and were expected to serve AI for 25 years.

The chapter on civil aviation in Rai's book carries below it heading two statements credited to Mail Today stories. The chapter then starts with, "If the above statements (in Mail Today) are true, why did we make the purchases and within five years of the delivery of the aircraft, sell them at roughly Rs 427 crore each to Etihad Airways after having purchased them in 2005 for Rs 1,300 per aircraft? How did our assessment go so horribly wrong? Have we held those responsible accountable? Indeed, will we ever be able to so? When will we learn from our mistakes?" Rai had said at that time. "An enquiry was needed into the issue. Some kind of a postmortem is required as to why the decision got so horribly wrong."

AI had taken the stand that the long-range Boeing 777s were not fuel efficient and that it was losing money on its overseas flights. However, other airlines, including Etihad, were still operating these planes.