The Hindu Business Line : IA fleet purchase plan awaits CCEA approval

THE long-delayed fleet acquisition plan of Indian Airlines (IA) is expected to be placed before the Cabinet Committee on Economic Affairs (CCEA) next month.

The Ministry of Civil Aviation expects to get the comments of other Ministries, including Finance, by next week. Thereafter, the note for the CCEA will be moved, incorporating suggestions put forward by other Ministries, Government officials said.

"We are moving as fast as possible on the IA fleet acquisition proposal. We decided against rushing through with it because it is best to complete everything and then move the acquisition proposal before the Cabinet rather than have people point fingers at a later stage," the officials said when asked about the inordinate delay in the CCEA taking up the IA proposal.

The IA board had cleared the proposal for the airline to acquire 43 Airbus aircraft in March 2002. The Public Investment Board (PIB) gave its nod for the acquisition late last year at an investment of over Rs 9,000 crore. However, the State-owned airline will be in a position to start the process for acquiring new aircraft only after getting the nod from CCEA. The first of the new aircraft is expected to join the IA fleet 18 months after the deal is inked.

The airline has already cleared a proposal to come out with an initial public offering (IPO) to facilitate funding for the acquisition. The officials said that the airline is to shortly come out with advertisements seeking expression of interest for the appointment of advisors for the IPO.

The airline has been forced to lease aircraft to meet market demands. It recently entered the market for leasing up to 10 Airbus A-320.

The Government is also expected to take a decision shortly on allowing airlines of India to operate more flights abroad during the forthcoming winter season. "The airlines will submit their plans listing out their requirements for flying abroad by the first week of June. We will examine the proposals received with the entitlement under the air services agreement before allowing them to launch more flights," the officials said.

The first right of refusal to operate more flights to existing destinations or to add more destinations to the current routes will be with the two State-owned airlines — Air-India and Indian Airlines. Jet Airways and Air Sahara are keen to operate more flights to the UK and the US.

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