The Hindu Business Line : IA fleet acquisition plan on course

Official sources told Business Line that with the Government receiving a reply to the letter sent to the Chief Vigilance Commissioner (CVC), IA could technically start negotiations with the lowest bidder for its 43-aircraft fleet acquisition plan.

Sources, however, indicated that in view of the changed environment and the possibility of increased competition, IA is likely to have another look at the variety of aircraft, including wide-body aircraft it could require, and only then move ahead. This move is being viewed as an attempt to ensure that the airline is also in a position to take on competition in the future.

Apart from the possible competition that IA may face from the entry of private sector airlines on more international sectors, Air India (AI) has already announced that it plans to launch a low-cost airline next year that will operate on routes in the Far East and the Gulf region.

However, the Government has indicated that it may make some new international routes available to IA so that it is better able to utilise the new aircraft that it plans to acquire.

The IA board had, in March 2002, approved a proposal to acquire 43 Airbus aircraft at an estimated value of Rs 10,000 crore. The board approval was for Airbus A-320, A-321 and A-319. The airline has estimated that 70 per cent of the 43 aircraft to be acquired would be for replacement of the existing fleet.

At present, the IA proposal is pending with the Government which is yet to hold the Public Investment Board meeting for the acquisition process to go through. The previous National Democratic Alliance Government had fixed the meeting for January this year but it was called off at the last minute.

In the meanwhile, IA has been leasing aircraft to meet its capacity requirements.