CBI Seeks to Close Air India Aircraft Leasing Irregularities Case
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India's CBI has filed a closure report in the Air India aircraft leasing case, concluding no criminal intent was found in the long-running investigation.
Key Takeaways
- •CBI finds no criminal intent in Air India's aircraft leasing deals from 2006.
- •Investigation centered on an estimated loss of 840 crore from allegedly idle aircraft.
- •A Special Court will review the closure report on March 12, 2026, after hearing the complainant.
- •The original FIR alleged leasing of 15 aircraft without available trained pilots.
A Special Court in New Delhi is now reviewing a closure report from India's Central Bureau of Investigation (CBI) in a long-standing case involving alleged irregularities in aircraft leasing by the formerly state-owned Air India. The CBI's report concludes its investigation, which began in 2017, by stating it found no evidence of criminal conspiracy or intent by officials at the airline or the Ministry of Civil Aviation. The court has scheduled a hearing for March 12, 2026, to consider the report.
The case's resolution hinges on the court's acceptance of the CBI's findings. The investigation examined leasing decisions made over 15 years ago, which were alleged to have caused significant financial harm to the national carrier. The court has issued a notice to the complainant, the Centre for Public Interest Litigation, whose input will be considered before a final decision is made on whether to close the case.
Background of the Allegations
The investigation was initiated following a directive from the Supreme Court of India. The CBI registered a First Information Report (FIR), a document that formally starts a criminal investigation in India, on May 29, 2017. The FIR centered on allegations that officials at the Ministry of Civil Aviation and the National Aviation Company of India Ltd (NACIL) made detrimental aircraft leasing decisions starting in 2006.
NACIL was the entity formed in 2007 after the merger of Air India and Indian Airlines, a move intended to create a stronger national airline. The FIR alleged that in 2006, officials opted to lease a large number of aircraft through Dry Lease and Wet Lease arrangements without conducting adequate route studies, market analysis, or pricing strategies. A dry lease provides an aircraft without crew, while a wet lease includes the aircraft, crew, maintenance, and insurance (ACMI).
The specific allegations included the dry leasing of four Boeing 777 aircraft for a five-year term, even as Air India was expecting delivery of its own purchased aircraft from July 2007. This decision reportedly resulted in five of the airline's owned Boeing 777s and five Boeing 737s remaining idle between 2007 and 2009. The estimated financial loss to Air India from this period was approximately 840 crore (approx. USD 100 million).
Further claims in the FIR stated that lease agreements lacked early termination clauses, making them costly to exit and leading to further financial losses. It also alleged that 15 expensive aircraft were leased despite a known shortage of trained pilots available to operate them.
CBI's Investigation and Findings
After a multi-year probe, the CBI filed its closure report in 2024, concluding that no criminal offense could be substantiated. The agency determined that the necessary criminal intent to prove charges of corruption or cheating was absent. According to the CBI, while the commercial decisions may have been flawed, they did not amount to a criminal conspiracy against public servants or private entities involved.
The agency has formally requested the court to accept its findings and permit the return of seized documents to the relevant departments and individuals. The court's role is now to assess the thoroughness of the investigation and decide whether the conclusion to close the case is justified.
In response to these financial pressures, a Sale-and-Lease-Back scheme was introduced in 2007 at the ministry's suggestion. This common industry practice involves an airline selling its aircraft to a lessor and immediately leasing it back, which converts a fixed asset into cash to improve liquidity. While a standard financial tool, its implementation during this period was also part of the CBI's overall review.
What Comes Next
The legal process will resume on March 12, 2026, when the Special CBI Court at Rouse Avenue will formally consider the closure report. The court's decision is not automatic; it will hear arguments from the complainant, the Centre for Public Interest Litigation, which originally brought the matter to the attention of the Supreme Court. The complainant can challenge the CBI's findings and argue for further investigation or for the case to proceed to trial.
If the court accepts the closure report, the long-running investigation into these historical leasing deals will officially end. If it rejects the report, it could order the CBI to conduct further inquiries or proceed with charges based on the existing evidence.
Why This Matters
This case highlights the significant challenges involved in managing large, state-owned enterprises and the fine line between poor commercial decisions and criminal misconduct. For the Indian aviation industry, the closure of this investigation would resolve a legacy issue that has shadowed Air India through its transition to private ownership under the Tata Group. The outcome will also be watched closely as a precedent for how allegations of corruption and mismanagement within public sector undertakings are adjudicated in India.
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Written by Ujjwal Sukhwani
Aviation News Editor & Industry Analyst delivering clear coverage for a worldwide audience. Covers flight operations, safety regulations, and market trends with expert analysis.
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