The Hindu Business Line : IA awaits Govt nod to bargain on Airbus price

THE Indian Airlines (IA) should be in a position to negotiate for prices of the Airbus aircraft that it plans to acquire and this is despite the firming up of prices in the international market in the recent past.

"The IA order is big. It is not the biggest order, which Airbus has got, but it is sizeable. Despite the IA board decision having been taken soon after the incidents of September 11, once the Government clears the project, IA should be in a position to negotiate a good price," said Mr David Velupillai, Regional Press Manager, Airbus Industrie, in response to a question whether there could be an increase in aircraft prices, now that the market is firming up.

In March 2002, the IA board had cleared a proposal to acquire 43 Airbus aircraft at an estimated cost of about Rs 10,000 crore. However, the state-owned airline has been unable to place any firm order on Airbus for the aircraft as the relevant clearances from the Government are still awaited.

Meanwhile, Airbus' competitor, Boeing, has written to IA emphasising on the potential saving of more than Rs 700 crore if the airline were to acquire its aircraft, instead of the Airbus aircraft.

When asked to comment on the Boeing communication, Mr Velupillai merely said that such things happen in a "democracy" and added that the process followed by IA in the selection of the aircraft for acquisition was "rigorous."

Airbus officials said that the total package for running the Airbus aircraft, including the cost of fuel, training and maintenance over a 15-year period, would work out to be lower than what the competitor had to offer.