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Air India pilots seek probe into insurance of grounded aircraft

Air India pilots seek probe into insurance of grounded aircraft

Air India (AI) pilots have accused the management of squandering $6 million (Rs 36 crore) annually on insurance of grounded aircrafts.

(Photo: Reuters) (Photo: Reuters)

Air India (AI) pilots have accused the management of squandering $6 million (Rs 36 crore) annually on insurance of six Boeing 737-200Fs which have been out of service for more than three years.

The Indian Commercial Pilots Association (ICPA), a union recognised by the AI management, has written to Civil Aviation Minister Ashok GR Pusapati, AI Chairman and Managing Director Rohit Nandan and the Chief Vigilance Commissioner seeking an independent probe and fixing accountability on officers responsible for 'squandering' money on insuring these grounded planes.

"We seek an immediate, time-bound investigation by an external agency to look into this financial irregularity," ICPA general secretary Shailender Singh has said in a letter addressed to the minister. The six planes were converted into freighters for cargo operations at a considerable expense at a time when they had almost completed their lifespan.

The contract for their use was executed with logistics firm Gati in May 2007, which was discontinued in March 2009 due to certain disputes. The arbitration tribunal had recently ordered AI to pay Rs 26.82 crore to the private company.

"We also demand a complete and independent probe into this contract and a diligence audit into how the case was handled by the management. What is baffling is that the management is maintaining these aircraft in its fleet and paying hefty insurance premium for no use," the letter alleged.

ICPA has informed the minister that the management had renewed insurance on October 1 for nearly $29 million (Rs 177 crore) to cover its 132 aircraft (including 17 of AI Express and eight of Alliance Air,) which was close to 18 per cent higher than $23 million (Rs 140 crore) paid last year.

Terming ICPA's allegations as "false, mischievous and misleading", an AI spokesperson said that the five Boeings were insured at only $1 million last year and $50,000 this year.