“The first case has been registered against unknown officials of Ministry of Civil Aviation (Government of India), Air India and unknown private persons to investigate the allegations relating to purchase of 111 aircraft for national airlines costing about Rs. 70,000 crore ($10.6 billion) to benefit foreign aircraft manufactures. Such a purchase caused an alleged financial loss to the already stressed national carriers,” a CBI statement said.
The CBI has also said that it has registered case against government officials, Air India and private companies to investigate the allegations of leasing of large number of aircraft without due consideration, proper route study and marketing or price strategy. “It was also alleged that the aircrafts were leased even while aircraft acquisition program was going on,” CBI added.
Air India is facing heavy losses and has a debt of approximately $7.8 billion. It is alleged that with the collusion of private players, officials had made arrangements in such a way that Air India flew its aircraft on loss-making routes. The CBI is also investigating the charges of giving up profit-making routes and profit-making timings of Air India in favor of national and international private airlines causing a huge loss to the national carrier.
With 140 long-haul fleet, Air India controls 17% market share on international routes and 14.6% of domestic passenger market. Due to continuous losses, Indian government is considering to sell it to private players.
"Today, what has happened is (Air India's) market share is 14%. And the debt is $7.8 billion. Now there are private airlines that are flying — Indigo, GoAir, Spicejet, Jet Airways — there you don’t invest money. But to run Air India, you have invested $7.8 billion. That money is government’s money, that’s your money. It could have been used for school education. And if 86% of flying can be handled by private sector, so it can also handle 100%,” Indian finance minister Arun Jaitley said a few days back.
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