India police to probe US$10.8b 111-plane order from 2005

India’s federal investigation agency will probe a decade-old deal by the national carriers to acquire 111 aircraft, which saddled the flag carrier Air India Ltd with losses, said the Central Bureau of Investigation (CBI).

The CBI registered three cases and one preliminary inquiry in the light of orders from the Supreme Court in January, according to the statement dated May 29 on its website.

The cases include investigating allegations regarding buying planes for 700 billion rupees (RM46.22 billion), said the CBI.

The acquisition allegedly caused a financial loss to the “already stressed” national carrier, it said.

Praful Patel, who was India’s civil aviation minister at the time of the purchases, didn’t immediately respond to phone calls seeking comment.

In December 2005, India’s cabinet gave an approval to the national carrier to buy 68 aircraft from Boeing Co.

In 2006, state-owned Indian Airlines Ltd inked an agreement to buy 43 planes from Airbus SE. While the aircraft orders were made separately, the two national carriers were later merged by 2007 into the National Aviation Co of India Ltd, which operated under the brand Air India.

The CBI said it’s also investigating allegations of leasing of a large number of aircraft “without due consideration”.

Also part of the probe would be allegations about giving up profit-making routes by Air India in favour of national and international private airlines, which caused a “huge loss” to the national carrier, it said.

Air India’s aircraft deal was controversial at the time of the purchase itself.

A day after the Mumbai-based carrier chose to buy 23 Boeing 777 aircraft and 27 Dreamliners, Nigel Harwood, Airbus’s then vice-president of sales for India, said in an interview the European company wasn’t given a “fair chance”.

Air India denied that, saying it took “strong exception” to the claims.