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Ashwini Phadnis

New Delhi , Sept. 27

INDIA could be weeks away from inking a multi-billion dollar deal with the US-based aircraft manufacturer, Boeing, for the purchase of 68 aircraft.

Official sources told Business Line that Air India (AI), which is to purchase 50 Boeing aircraft and 18 for its 100 per cent subsidiary Air India Express, was in the "middle of price negotiations" with the manufacturers that it expects to complete by the first week of October.

"We hope to complete the entire process and get final approval in October itself. All attempts will be made to conclude the price negotiations before AI goes for approval from the Public Investment Board (PIB)," sources added.

In contrast, Indian Airlines had to await clearance from the PIB before it was allowed to complete the price negotiations with the European aircraft manufacturer, Airbus Industrie, for its 43-Airbus aircraft fleet acquisition plan.

As regards the fleet acquisition programme of AI Express, the low-cost airlines of AI, officials said the price negotiations for acquiring 18 Boeing 737-800 W aircraft were started before taking up the Maharaja's proposal.

While refusing to be drawn into what the final price of the 68 aircraft acquisition would be, sources indicated that AI should be in a position to negotiate a "hard bargain" as the planes were being ordered from the same manufacturer.

"There are likely to be two orders but every one knows that the parent of both the airlines is the same. This should help get a better price," sources said.

In April this year, the AI board had approved a proposal to acquire eight B 777-200 Long Range, 15 B 777-300 Extended Range and 27 B 787 at a total cost estimated to be about Rs 30,000 crore, prior to negotiations with the manufacturers of air frame and engines.

The acquisition of 18 B 737-800 that was cleared by the AI Charters Limited Board is likely to cost AI Express about Rs 10,000 crore.

The airlines plans to fund the acquisition by tying up 85 per cent of monies required through external commercial borrowings while the rest will be sourced from internal accruals.

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