Business
Indian Airlines all set to acquire new fleet
By Gargi Parsai
NEW DELHI DEC. 5. After a lull of 11 years, Indian Airlines (IA) is poised to acquire new aircraft to expand its fleet. The board of directors today advised the airline to call for fresh bids for acquisition of aircraft to replenish its fleet and phase out aging aircraft. This in effect means that the disinvestment of Indian Airlines is totally off.
The board has asked Indian Airlines to prepare a specific proposal for acquisition of new aircraft for seeking the approval of Project Investment Board (PIB). Fresh bids will also have to be called by the airline for the six 50-seater aircraft it is planning to acquire on lease. The revised bids should be obtained by December 21
The board, chaired by CMD, Mr. Sunil Arora, has advised calling for fresh tenders in view of the September 11 terrorist attacks in the U.S. and the subsequent recession in the aviation market. A sub-committee of the board has been constituted to oversee the formulation of the proposal by a taskforce of the management of Indian Airlines.
In March this year, Indian Airlines had completed a techno-economic evaluation of the two main bidders _ the U.S.-based Boeing Company and the European Consortium, Airbus Industrie _ and kept it in a sealed cover. However, as the airline was up for disinvestment, the decision to acquire new aircraft was put on hold.
Today's decision lifts the cap imposed on the airline by the Government from acquiring aircraft when the process of disinvestment was on. As is known by now, the disinvestment of Indian Airlines is no more on the cards after the two main bidders _ Videocon and the Hindujas _ were disqualified under the guidelines set by the Department of Disinvestment.
The airline had initially planned to acquire up to 40 aircraft over a period, but now it is likely that the airline will go in for about 18 aircraft in phases. The 12 Boeing 737s with Alliance Air _ a subsidiary of Indian Airlines _ are earmarked for replacement. So also nine Airbus A-300s with the Indian Airlines. The airline at present has a fleet of 57 aircraft including the four Airbus A-320 and the two Airbus A-300 acquired on lease recently.
The aircraft Indian Airlines is looking at are 100-plus and 150 seaters. In the first phase it may acquire 12 aircraft with an option of six. In the case of the six ATR-42 that were being hired on lease, the board felt that since in the aftermath of September 11 events, the airline was able to obtain substantial concession (of nearly $15 million) when it renegotiated the lease rental for the newly acquired Airbus A-320, it should be able to get a similarly good deal for the 50-seaters.
The Minister for Civil Aviation, Mr. Shahnawaz Hussain, had recently indicated that the Government would extend financial support to Indian Airlines for expansion of its fleet. To maintain transparency, the final deal would be handed over to the CBI for a pre-inquisition.
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