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AI Board nod to buy 28 planes

By Our Special Correspondent

NEW DELHI NOV. 8. The Air-India Board today approved the much-awaited fleet acquisition plan, giving the go-ahead for the purchase of 28 passenger aircraft at an estimated cost of about Rs. 10,000 crores.

As per the proposal for fleet expansion of India's international carrier, cleared by the Board, 10 would be long-range Airbus A-340 aircraft and 18 short-range Boeing 737-800 planes, the AI Managing Director, Sunil Arora, said. While A-340 is a 272-seater aircraft, Boeing 737-800 is a 146-seater. The aircraft would be powered by CFM engines. The Board meeting was presided over by the AI Chairman and Civil Aviation Secretary, K. Roy Paul.

The Board considered the report of the techno-economic negotiating committee and approved the proposal to go for 28 aircraft. The deal is split between the two major aircraft manufacturers, Airbus Industrie and the Boeing company of the U.S.

The fleet acquisition plan had been hanging fire for about a year and the Board this time pushed it through. The new aircraft would join the AI fleet over a period of five years and replace 14, which had been taken on dry lease. The leased aircraft include 11 Airbus A-310 and three Boeing 747-200.

Mr. Arora said the new aircraft would phase out the older ones, rationalise its fleet and expand capacity. Air India has already announced new flights to Shanghai and Frankfurt and doubled the frequency to the U.S. as the carrier looks poised for a turn-around during 2003-04, wiping out losses due to outbreak of SARS and the Iraq war. It had posted a profit of Rs. 130 crores in the last fiscal but had to face a downturn of the global aviation scenario.

Air India has a fleet strength of 30 aircraft with an average age ranging from 14 to 23 years.

The proposal, as approved by the Board, would be sent to the Civil Aviation Ministry for Government approval and would have to pass through the Public Investment Board (PIB) and the Cabinet Committee on Economic Affairs (CCEA) before the letter of intent could be signed.

With the AI Board formally clearing the fleet acquisition plan, it joins the proposal of the Indian Airlines Board for purchase of 43 aircraft comprising Airbus A-319, A-320 and A-321 from Airbus Industrie which has crossed the pre-PIB stage.

The IA deal is also worth Rs. 10,089 crores. Aviation sources said the Government could find it easier to give its nod for the IA and AI deals together.

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