Air India-Indian Airlines merger, aircraft purchase order under CBI scanner

NEW DELHI: The CBI has initiated investigations into key decisions made on Air India when the United Progressive Alliance was in power, including the merger of Air India and Indian Airlines, purchase of 111aircraft by the national carrier and giving away of profitable routes to rival airlines.

The agency filed two cases on the aircraft purchase deal, another on giving away the routes and started a preliminary inquiry into the merger of the airlines. In a statement, the CBI said it started the probe following orders from the Supreme Court. Air India had put an order for 111aircraft — 68 from Boeing and the balance from Airbus.

According to the statement, the purchase for about Rs 70,000 crore benefited foreign manufacturers, causing an “alleged financial loss” to the “already stressed” national carriers.

The third FIR, filed against unknown officials of the civil aviation ministry and Air India for giving up profit-making routes, said it had caused a huge loss to the national carrier. The agency is making an inquiry into the role of unknown officials in the civil aviation ministry in the 2007 deal to merge the two airlines, allegedly causing a loss of Rs 10,000 crore.

Air India and Indian Airlines were merged to create Air India despite opposition from both state-run airlines. Most of the decisions were taken when Praful Patel was the minister of civil aviation.

People who have been tracking the civil aviation sector, especially Air India, welcomed the move but said it was too late in coming. “All these decisions (being inquired into by the CBI) harmed AI financially and also the future of Air India. AI employees were expecting such an action from the government, but this should have happened many years earlier,” said Jitendra Bhargava, former executive director at the airline. Air India chairman Ashwani Lohani, in a recent interview, had termed the merger as the reason behind the national carrier’s downfall.

Air India