By Newsgram Staff Writer
Comptroller and Auditor General (CAG), after being quite for a long time on Monday, questioned state-run carrier Air India for selling five Boeing 777s at a loss to Etihad in 2013.
The CAG has sought civil aviation ministry’s response on why this deal was allowed under the United Progressive Alliance government.
The CAG query addressed two aspects – one of selling the aircraft after six years of operation, when they were meant to be operated for 25 years; and the second of selling it at much lower than the cost price, The Economic Times reported.
Former comptroller and auditor general, Vinod Rai had earlier raised questions about Air India and Etihad deal for $350 million in his 2014 book ‘Not Just an Accountant’. In the book, he had mentioned, “Why did we make purchases and within five years of the delivery of the aircraft, sell them at roughly 427 crore each to Etihad Airways after having purchased them in 2005 for 1,300 crore per aircraft?”
Air India in its defense has said that the long-range planes were not not fuel efficient and were losing money on its overseas flights, including to US and Japan, according to Economic Times.
Etihad reportedly is currently using the aircraft to connect to Abu Dhabi to destinations in US. The long range Boeing 777-200-LR has a range of 17,370 km, allowing it to connect almost any city in the world from Etihad’s Abu Dhabi hub.