CBI to probe controversial AI-IA merger, other UPA-era deals

The Central Bureau of Investigation (CBI) will probe the controversial merger of Air India and Indian Airlines, besides alleged irregularities in purchase and lease of aircraft by the two state-run carriers under the UPA government, which caused "huge" losses to the exchequer.

The investigative agency on Monday registered three FIRs and a Preliminary Enquiry (PE) to go into the controversial decisions made by the erstwhile Manmohan Singh government with regard to the two national carriers, including surrender of profitable routes to favour private airlines.

The cases have been registered against unidentified officials of Air India, Ministry of Civil Aviation and others under charges of criminal conspiracy, cheating and corruption, CBI spokesperson R K Gaur said.

“The cases relate to decisions taken by the ministry during the tenure of the UPA, which caused losses of tens of thousands of crore of rupees to the exchequer,” he said.

“The allegations relate to purchase of 111 aircraft for national airlines costing about ~70,000 crore to benefit foreign aircraft manufacturers. Such a purchase caused an alleged financial loss to the already stressed national carriers,” Gaur said about the first FIR.

The CAG had in 2011 questioned the rationale behind the government's decision to order 111 airplanes for AI and Indian Airlines—48 from Airbus and 68 from Boeing— for about ~70,000 crore in 2006.

Calling the decision a “recipe for disaster”, the government auditor had said it should have raised "alarm" in the Ministry of Civil Aviation, Public Investment Board and The Planning Commission.

The second case pertains to leasing of a large number of aircraft without due consideration, proper route study and marketing or price strategy, he said.

“It was also alleged that the aircraft were leased even while aircraft acquisition programme was going on,” he said.

The third case involves allegations of surrender of profitable routes and timings of Air India to favour national and international private players which allegedly caused a “huge” loss to the state-run carrier.

In its report on the merger of Air India and Indian Airlines, the CAG had called it “ill-timed”. Now the CBI will go into various aspects of the merger.