With Air India seeking a compensation package for the substantial delays in delivery of Boeing’s Dreamliner aircraft, the US manufacturer today said it will “not write a cheque” for $500 million to the airline.

The President and Chief Executive Officer of Boeing’s commercial airplane unit, Mr Jim Albaugh, said he had read reports coming from India.

“I think if we settle for $500 million somebody would have told me. We do not comment on deals that we have done, but I can tell you that we are not writing anybody a cheque for $500 million,” he said when asked about the reports of it paying compensation to Air India.

Speaking at the JP Morgan aviation and Defence conference here today, Mr Albaugh said he had read similar reports six months ago which had claimed that Boeing could pay a billion dollars as compensation to the Indian carrier.

Yesterday, the Joint Secretary in India’s Ministry of Civil Aviation, Mr Prashant Shukul, had told reporters in Hyderabad that while state-owned Air India had demanded a billion dollar compensation from Boeing, the Chicago-based aircraft maker has agreed to pay $500 million.

Mr Shukul, who was speaking on the sidelines of the India Aviation 2012 on Wednesday, said the Government is trying to push Boeing to pay more.

Air India has sought a compensation package, a mix of both discount in services and cash, from Boeing for delay in the delivery of its 787 Dreamliners.

Air India had ordered 27 Dreamliners in 2005 and Boeing failed to stick to the delivery schedule. As per the original schedule, Boeing was to start delivery from September 2008.

Mr Albaugh said the GE certification for the 787 aircraft has been completed a week ago and the first aircraft with the GE certificate will be delivered to Air India in the weeks to come.

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