The Hindu Business Line : IA seeks extension on prices for aircraft acquisition

THE state-owned Indian Airlines (IA) has sought a three-month extension, till the end of June this year, on the validity of the prices quoted by the two aircraft manufacturers — Boeing and Airbus — for the airline's 43-aircraft Rs 10,000-crore fleet acquisition plan.

The decision to seek another extension has come in the wake of the validity of the current price bid expiring on Wednesday (March 31). With the Government nod for the airline to acquire aircraft still pending, IA has written several times to the manufacturers seeking extension on the validity of the prices quoted.

The IA board had, in March 2002, decided to acquire 43 Airbus aircraft, including Airbus A-319, A-320 and A-321 aircraft, at an estimated cost of Rs 10,089 crore.

The current decision to seek a three-month extension comes close on the heels of the airline seeking a six-month extension on the prices quoted in October last year.

Similarly, in March last year, IA had approached the Government seeking extension of "three months or as much time as thought appropriate." In response, the Government had asked the airline to seek a six-month extension.

The fleet acquisition plan is awaiting clearance by the Public Investment Board (PIB) before IA can finally negotiate with the manufacturers. While the pre-PIB meeting has cleared the project, the PIB, which was scheduled to meet at the end of January this year, was postponed at the last moment. No fresh dates have yet been fixed for the meeting.