The Hindu Business Line : e-GoM meet tomorrow on AI fleet acquisition

THE fleet acquisition proposal of Air India (AI) is set to cross another hurdle with the empowered Group of Ministers (e-GoM) scheduled to meet here on December 24.

The five-member e-GoM, headed by the Finance Minister, Mr P. Chidambaram, is to meet with Boeing officials on Saturday to have one final round of price negotiations to get the best possible price for the 68 aircraft that AI is to purchase.

The e-GoM includes the Ministers for Programme Implementation, Law and Civil Aviation.

The acquisition cost has been pegged at Rs 33,000 crore for AI and at Rs 4,900 crore for AI Express.

The decision to refer the 68 Boeing aircraft acquisition proposal to an e-GoM was taken by the Cabinet Committee on Economic Affairs on December 15. The CCEA has given its `in-principle' nod to the proposal. The airline plans to acquire 8 Boeing 777-200 Long Range, 15 Boeing 777-300 Extended Range and 27 Boeing 787 aircraft.

In addition, 18 Boeing 737-800 aircraft are being acquired for Air India Express, the 100 per cent low-cost subsidiary of AI.

Earlier this year, the e-GoM managed to get a price reduction of more than Rs 340 crore on the final price that Indian Airlines will pay for acquiring 43 Airbus aircraft.

It secured direct concessions of $75 milllion or Rs 349 crore.

Besides, the e-GoM managed to get several other concessions including both Airbus and the engine manufacturer CFM agreeing to increase the counter trade.

This is likely to result in an increase of trade opportunities of $145 million for India with France.

Besides, Airbus also agreed to set up an ultra modern training centre for pilots here with an investment of $75 million.