IA panel starts evaluation of bids for aircraft -- `Deal must be completed in 6-8 months'

Ashwini Phadnis

NEW DELHI, Dec. 26

EVEN as the Indian Airlines' (IA) in-house aircraft evaluation committee gets down to the task of evaluating the revised price bids, doubts are being raised on whether the Government will be able to act fast enough to benefit from the depressed prices in the market.

Industry sources told Business Line that for the airline to be able to get the most favourable prices, the deal would have to be completed within the next ``six-eight months.''

When contacted, the Minister for Civil Aviation, Mr Syed Shahnawaz Hussain, told Business Line that the Government had received no such information in writing.

``We have asked the airlines to expedite the process and complete it at the earliest. But there is no question of setting deadlines just yet. Besides, we have received no official intimation from anyone saying that the depressed prices are likely to prevail only for the next six-eight months,'' Mr Hussain said.

IA received the revised financial bids from the two major aircraft manufacturers - Boeing and Airbus - on December 21. The bids were opened on Wednesday by a three-member sub-committee, which includes the Joint Secretary (F&A), Ministry of Civil Aviation, Chairman and Managing Director, IA, and Managing Director, Air India (AI).

While IA sources have indicated that the airline is likely to submit its report to the Government by the end of January or early February next year, the process of depositing the deposit money with the aircraft manufacturer, that would ensure that the deal is actually taking place, can only happen after the project has been approved by the Union Cabinet.

However, sources say that before the report is sent to the Cabinet for final approval it will have to be approved by several committees of the Government, which was likely to slow down the acquisition process. This slow process may result in IA losing the opportunity of picking up aircraft at lower prices, sources said.

IA is to acquire up to 40 aircraft over a five-year period. Among the aircraft, which have been shortlisted, include the Boeing 717 and the several versions of the Boeing 737 including Boeing 737-600, 737-700, 737-800, 737-900 and Airbus offering the A-319, and A-321, among others.