The Hindu Business Line : `IA fleet expansion plans on track'

DESPITE objections raised by the Ministry of Finance, Indian Airlines' plans to acquire 43 aircraft at a cost of Rs 9,000 crore is on track and there will be no delays in clearance, senior Government officials said on Wednesday.

The Finance Ministry's concerns were taken up at a meeting between the Secretary Civil Aviation, Mr Ajay Prasad, and the Expenditure Secretary, Mr Adarsh Kishore, here on Tuesday. The Finance Ministry wondered whether IA was getting the best possible price from the European aircraft manufacturer, Airbus Industrie. Sources indicated that at the moment it seemed unlikely that IA would be asked to go in for further price negotiations with the aircraft manufacturer.

Interestingly, some Members of Parliament also questioned the cost of the project, especially as a South East Asia based low-cost airline is said to have negotiated a similar deal with Airbus at a lower cost.

The aircraft manufacturer has already indicated that delivery could be delayed unless a firm decision on the order was taken soon.

"It takes about 12-15 months for the entire specifications ordered by an airline to get ready. If the airline plans to acquire the aircraft in September 2006, we should receive the specifications soon," a senior Airbus official had said in June this year. The company had then said that it was "hopeful" of getting full approval in the next few weeks.

The Public Investment Board has already cleared the airlines' fleet acquisition proposal and also agreed to provide a sovereign guarantee.

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