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Home  » Business » Air-India to buy 68 new aircraft

Air-India to buy 68 new aircraft

Source: PTI
September 30, 2005 13:23 IST
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After giving a go ahead to Indian Airlines for purchasing 43 aircraft, the government is likely to complete all formalities by October end to allow Air-India to acquire 50 aircraft of its own and another 18 for its wholly-owned subsidiary, Air India Express.

The price negotiations for these 68 aircraft with American manufacturer Boeing were already on and are likely to be completed in another week's time, official sources told PTI in New Delhi.

All efforts would be made to conclude the price negotiations before Air-India's plans to buy these aircraft goes for approval to the Public Investment Board, which clears major acquisition programmes by public sector companies, the sources said.

The process of pre-PIB has already been completed a few weeks ago.

Along with the negotiations to get a "good price" for the buy, the delivery schedule of these aircraft would also be given a final shape in these parleys, the sources said.

The price negotiations for 18 Boeing 737-800W aircraft for Air India Express had begun before Air-India drew up its final fleet plan.

In April this year, the A-I board had approved a proposal to acquire eight Boeing 777-200 Long Range, 15 B 777-300 Extended Range and 27 B 787 at a total cost of about Rs 30,000 crore (Rs 300 billion). The 18 planes for its subsidiary would cost about Rs 10,000 crore (Rs 100 billion).

Asked whether there would be two separate orders for Air-India and its subsidiary, the sources said even if separate orders were placed, it was known that the parent company of both the carriers was the same. This would help in getting a better price for the entire deal.

They said the public sector carrier was in a position to negotiate a "hard bargain" as all the 68 planes were being ordered from the same manufacturer.

In the meantime, Air-India is leasing at least one aircraft to meet the capacity constraints and two others to cater to the upcoming Haj operations in the next few months.
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