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Our Bureau

New Delhi , Oct. 13

THE Public Investment Board (PIB) today cleared the Rs 35,000-crore proposal from Air India and its subsidiary, Air India Express, to buy 50 and 18 aircraft, respectively, from US-based manufacturer Boeing. The PIB also recommended that the Government extend `sovereign guarantee' to the entire acquisition proposal.

The issue will now go to the Union Cabinet for final clearance.

"The PIB has recommended to the Government the proposal of AI and AI Express to acquire aircraft. The proposal has been cleared on a not exceeding basis," the Secretary Civil Aviation, Mr Ajay Prasad, said shortly after the meeting concluded here on Thursday. In effect this means that if the airlines, which are yet to end price negotiations, are able to negotiate a price lower than what has been cleared by their respective Boards, then the acquisition proposal will go for final clearance.

In April this year, the AI board had approved the proposal for acquisition of 50 Boeing aircraft at an estimated Rs 30,000 crore. AI Express's proposal to acquire 18 Boeing aircraft, at an estimated Rs 5,000 crore, was cleared at an earlier meeting in December 2004.

The Chairman of PIB and Expenditure Secretary, Dr Adarsh Kishore, told reporters, "We have recommended that the full requirement of credit, both internally and overseas, be covered by a sovereign guarantee."

The Civil Aviation Secretary added that there was "no direct correlation" between the clearance given to AI and its proposal to tap the market through an initial public offering (IPO) in the coming months.

The 50 aircraft that AI is looking to acquire include eight Boeing 777-200 Extended Range, 15 B 777-300 and 27 B 787 aircraft while AI Express wants to acquire 18 Boeing 737-800 W aircraft.

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