Financial Daily from THE HINDU group of publications
Thursday, Oct 09, 2003
Financial Daily from THE HINDU group of publications Thursday, Oct 09, 2003 |
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Airlines Logistics - Airlines Boeing dangles savings carrot before IA Ashwini Phadnis
New Delhi , Oct. 8 THE last has still not been heard on the Rs 10,000-crore 43-aircraft fleet acquisition plan of Indian Airlines (IA). The US-based aircraft manufacturing major, Boeing, has written to Indian Airlines (IA) outlining a saving potential of "several hundred crore rupees" for the airline if it were to acquire the Boeing-737 new generation family to meet its fleet replacement plan. The letter, which has been delivered to IA, comes in response to the airline seeking an extension of the price bids quoted by the two aircraft majors - Airbus and Boeing. After evaluating the bids received, the IA board, in March 2002, decided to acquire 43 Airbus A-320, A-319 and A-321 aircraft. The airline had written to the engine and aircraft manufacturers as the price offers were valid till September 30 this year. While Airbus has already sent a letter extending the validity of its earlier price bid, Boeing has sent the letter outlining the saving possible if its aircraft were acquired. The Boeing letter points to the technological changes that have taken place since the offer was made in December 2001, particularly `Winglet technology' which is available for Boeing 737-700, 737-800 and 900. According to sources, Boeing has stated that the `Winglet technology', apart from reducing the fuel-burn requirement for operating the aircraft, will reduce the thrust on the engine. This will, in the long run, reduce the cost of maintenance of the machine during its life cycle. The sources also said that a "huge portion" of the cost saving for the airline will come in terms of the upfront payments it will have to make. However, the claims made in the Boeing letter have been countered by Airbus. The company's Senior Vice-President, Dr Kiran Rao, told Business Line from Toulouse that `Winglet technology' has been available for the past several years. "The technology will only bring small benefit to fuel-burn and only in the event that the airline flies on long sectors. However, in the case of IA, the average sector which an aircraft flies is less than two hours," Dr Rao said.
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