A newspaper said the state-run airline was claiming 710 million dollars from the US planemaker for failing to deliver 27 B-787 aircraft on time.

“The cancellation orders have already been issued by my engineering department,” Air India chairman and managing director Arvind Jadhav was quoted as saying by the newspaper.

He alleged that Boeing’s failure to deliver the 27 B-787 planes had caused large losses for the company.

“The entire schedule of Air India has gone haywire. We have put a claim of 710 million dollars for their failure to deliver the aircrafts to us in time,” the Air India chief told the newspaper.

Spokesmen for both Air India and Boeing declined immediate comment on the report.

Air India in 2006 signed a formal agreement to buy 68 Boeing airplanes in a deal that was estimated to be worth around eight billion dollars.

The carrier said it would buy 23 777s, 27 787-8 Dreamliners and 18 next-generation 737-800s.

The list price for a single aircraft varies from 165 million to 200 million dollars but Air India was believed to have negotiated a lower price because of its large order.

The airline faces a financial crisis after posting an estimated one billion dollar loss for the fiscal year ended March 31 and is hoping for a big government rescue package.

Faced with a sharp downturn in air traffic and overcapacity, it is also seeking to cut overhead costs by rationalising routes and aircraft deliveries.