Observing that the public sector carrier had completed price negotiations on the matter, he said the delivery of the planes from the European consortia Airbus Industrie is likely to start by the end of 2006.
On Air India's plans to acquire 50 aircraft, Prasad said the Board of A-I would meet next week to consider the purchase.
A-I board had recently approved the purchase of another 18 Boeing 737s for its low cost subsidiary, Air India Express, and the proposal was awaiting government approval.
He said while the planes delivery may start by the end of 2006, both IA and A-I have starting leasing aircraft to meet short-term requirements.
In the wake of competition, both from domestic private carriers and international airlines with the opening up of the civil aviation sector, Prasad said the two public carriers needed upgradation to face the challenges.
"We would certainly do everything possible within our means to make the two airliners competitive and take on rivals from the private sector," Prasad said.