Indian Airlines seeks revised bids for fleet expansion

Our Bureau

NEW DELHI, Dec. 5

IN an effort to take advantage of the softening of the global aviation market in the post-September 11 period, Indian Airlines has asked the major aircraft and engine manufacturers to submit revised financial bids by December 21 to push forward its fleet acquisition plan.

Sources told Business Line that the airlines board, which met here on Wednesday, decided to call for revised financial bids as IA had received communication from one of the two major aircraft manufacturers that it was willing to ``revise the business offer'' made earlier.

Sources said that it was likely to take IA between three and four weeks from December 21 to consider the fresh financial bids. `The airline should be in a position to provide its report to the Government by the end of January or early February,' sources said. IA has already completed a techno-economic evaluation of the aircraft best suited for its need, which has been kept under sealed cover since March.

While refusing to speculate on how much the airline would be able to save by calling for revised financial bids, sources pointed out that an international airline had been able to get new aircraft at a 27 per cent discount from the price, which had been quoted earlier to September 11.

Sources said that the board did not open the financial bids, which had been received earlier in view of the ``revised offer'' communication from one of the major aircraft manufacturers.

The airline is to look at inducting between 35 and 40 aircraft over a five-year period depending on the fleet mix, which is finally approved.

When questioned on whether IA would look at inducting more than 40 aircraft in view of the prevailing market conditions, sources said this was unlikely.

``IA is an operator and is not in the habit of earning revenue through leasing aircraft. The airline's demand for aircraft has been estimated at between 35 and 40 and we will take that number,'' sources said.

The board also decided to issue fresh global tenders for leasing five ATR aircraft for Alliance Air, the fully-owned subsidiary of IA, as the lease rates, which had been received through the present tender, were considered too high. Sources said that the advertisements calling for global tenders for leasing the ATR aircraft should be released within a month.

Further, the board also set up a three-member sub-committee to oversee formulation of the proposal for induction of large aircraft for the airline. The sub-committee is to include the Financial Advisor in the Ministry of Civil Aviation and the Managing Directors of Air India and IA.