The Hindu Business Line : Indian Airlines, AI to place orders for aircraft this year

Mr Praful Patel, Minister of State for Civil Aviation, and Mr Alex Wilcox, Chief Operating Officer, Kingfisher Airlines, at a conference on aviation in Bangalore on Thursday. - G.R.N. Somashekar

Bangalore , Feb. 10

INDIAN Airlines and Air India are expected to place orders worth over $6 billion for aircraft acquisition this calendar year.

The Minister of State for Civil Aviation, Mr Praful Patel, told newspersons on the sidelines of a CII seminar on civil aviation that both the airlines will place the orders in 2005 itself.

"The price negotiations are going on currently in the case of Indian Airlines. It is expected to be completed this February," Mr Patel said. Similarly, the Air India board will also decide on the acquisition during this month.

Earlier, addressing delegates at the seminar, Mr Patel said that a national civil aviation policy will be announced before April this year.

"We have already started to address a few issues as suggested by the Naresh Chandra committee report on civil aviation."

He said that a Bill would be placed during the Budget session of Parliament to appoint a regulator for the aviation industry.

Mr Patel said the Ministry will lobby with the Finance Ministry to extend the exemption on withholding tax on leasing aircraft by one more year.

Currently, the exemption is limited to April this year.

He admitted that the price of the aviation turbine fuel was one of the highest in the world. "We are trying to see that the ATF prices are brought down to international levels."

Airports modernisation

The Minister also said that the joint venture partners for modernisation and upgradation of the Mumbai and Delhi airports would be announced this year.

Request for proposal for the airports is being finalised and will be completed soon. After this, within 12 weeks, technical and financial bids will be called for and finalised.

Mr Patel said that a presentation on the progress of the Bangalore International Airport would be made to the Prime Minister, Dr Manmohan Singh, during his visit to Bangalore.

"We want to see that the first phase is complete within three years," Mr Patel said.

The CII Chairman for Karnataka, Mr K. K. Swamy, who is also Deputy Managing Director of Toyota-Kirloskar, said that the cycle-time for approvals needs to be reduced to avoid investor fatigue. "Bangalore airport is an example how an excellent proposal can be delayed."

He added that GDP growth will put pressure on the aviation infrastructure. "If we do not take off in the aviation sector, then India as a country will lose the opportunity for development."

Mr Swamy said that there was a need for more efficiency in cargo handling and, hence, world-class facilities are needed at airports. "The other complementary facilities like connectivity to airports also need to be improved and expanded."

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