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more-inAir India sold its five Boeing planes to Etihad Airways at a “significantly” lower cost than the “indicative” market price of the aircraft, CAG said in a report tabled in Parliament today.
The aircrafts were delivered to Etihad Airways during the period from January 2014 to April 2014.
According to the CAG, two parties — Etihad Airways of UAE and German Aviation Capital, Frankfurt — responded to open tender floated by Air India in May 2013.
Noting that while audit appreciates the savings realised in maintenance co\st and interest payments, the CAG report said, “Such savings cannot justify the shortcomings of the sale process.”
“Considering that the price offered by Etihad Airways ($67.3 million) was within this range of realisable value, AIL accepted the offer.
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An Air India Airlines Boeing 787 dreamliner takes off for a flying display during the 50th Paris Air Show at the Le Bourget airport near Paris, June 14, 2013.
Repeated calls to an Air India spokesman and an email seeking comment went unanswered.
Air India did not make certain provisions required under accounting standards and valued some assets differently, resulting in the understatement, the Comptroller and Auditor General (CAG) of India said.
Air India was bailed out in 2012 with $6.3 billion of government funding, after years of ceding market share to younger, low-cost rivals.
REUTERS/Pascal Rossignol/FilesNEW DELHI India’s state-owned airline Air India understated its operating losses by nearly $1 billion over three fiscal years to March 2015, the federal auditor said in a report, highlighting the carrier’s financial distress.
collected by :Victor Alphen