Air India, the national carrier of India, may have to back out of its deal with airplane manufacturer Boeing over the purchase of 27 of its newest planes, the 787 Dreamliner.

“Air India does not have the money to pay for the 27 Boeing planes. Air India will not increase its debt burden right now,” said civil aviation minister Vayalar Ravi Tuesday at a public event in Delhi. Air India had ordered 27 Dreamliners in 2005 from Boeing.

Air India is already heavily in debt, and struggling to raise revenue as upstart smaller players take more and more business away from Air India. Boeing (International) VP and (India) President Dinesh Keskar said he was unaware of any move by Air India not to take delivery of the Dreamliner. “As far as Boeing is concerned, the Dreamliner for Air India is ready for deliveries in the fourth quarter of 2011. That’s the stated position and will remain so.” Nothing new has been conveyed to him by the airline’s management, he added, reports The Economic Times of India.

Boeing has finally begun delivery of the new plane, and the launch customer was ANA of Japan. The 787 program suffered three years of delays but is one of the most widely successful planes with record orders before it was ever built.

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