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Thursday, Jul 04, 2002

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Boeing offers to cut price for IA deal

Ashwini Phadnis


THE US aircraft manufacturer, Boeing, has offered to lower the prices of aircraft to be sold to Indian Airlines, which plans to induct 43 new aircraft in the next five years.

The offer was made at a meeting that the aircraft manufacturer's Senior Vice-President, International Relations and former ambassador, Mr Thomas R. Pickering, had with the Minister for Civil Aviation, Mr Syed Shahnawaz Hussain, at Rajiv Gandhi Bhawan.

When contacted, Mr Hussain merely confirmed that the meeting had taken place, but declined to divulge specific details. "We got a request from the Ministry of External Affairs for a meeting with Mr Pickering. Since I will be out of town for the next two days, the meeting was fixed for this evening. All I can say is that no assurances have been given," Mr Hussain told Business Line.

Sources on condition of anonymity said that a reduction in the price of aircraft was made at the meeting, but declined to divulge the exact amount that the company was willing to slash.

Similarly, Mr Pickering when questioned on whether the issue of sale of aircraft was discussed merely said: "we always do discuss such things."

Mr Pickering, who had served in India earlier, added that the current visit was only to meet old friends and focus on the wide variety of opportunities that India had to offer.

"The Ministry of Civil Aviation is important to us," he said, adding that he would be back in India again to explore business opportunities.

Sources added that during the meeting it was made clear to the visiting delegation that the procedures prior to Public Investment Board (PIB) clearance for the sale had not yet taken place.

Besides, officials of the Boeing Company were told to put down on paper the fresh proposal and send it to the Central Vigilance Commissioner (CVC) to whom all the papers relating to IA fleet acquisition had been sent.

The IA board had only recently approved a proposal to acquire 43 Airbus aircraft at an estimated cost of more than Rs 10,000 crore.

It is interesting to note that an earlier proposal by an aircraft manufacturer to lower prices helped IA get a reduction of several million dollars per aircraft when the board finally decided to go for an all-Airbus fleet.

IA officials have all along maintained that the decision to go for an all-Airbus fleet was taken purely on the basis of price offers made by the two aircraft and engine manufacturers.

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