India’s civil aviation ministry said Tuesday it would cooperate with a federal inquiry into alleged irregularities in the purchase of 111 planes by state-run carrier Air India and its merger with Indian Airlines.
The Central Bureau of Investigation has filed three cases against Air India and launched an investigation into what it termed “unknown officials” at the ministry.
Civil Aviation Minister Ashok Gajapathi Raju said the ministry would cooperate with the CBI investigation, the Press Trust of India news agency reported.
The three cases relate to decisions and deals made under the previous Congress Party-led government.
Air India bought 111 aircraft for about 700 billion rupees ($10.8 billion), a transaction that benefited foreign aircraft manufacturers and caused losses at the state carrier, the CBI has alleged.
The second case pertains to Air India’s decision to lease airplanes while the acquisition of the new aircraft was underway, “without due consideration, proper route study and marketing or price strategy”, according to the CBI statement.
The third case alleges that the national carrier gave up profitable routes and flight timings to private and foreign airlines, thus causing “a huge loss to the national carrier”.
The federal agency is also probing the 2011 merger of Air India and its domestic sister airline Indian Airlines, alleging it caused a “loss to the national exchequer”.
India is one of the wold’s fastest growing airline markets but the once-dominant Air India — hit by delayed and cancelled flights and a generally poor service record — has lost market share to new private players, especially low-cost carriers.
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