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Indian Airlines fleet acquisition hits snag
BY OUR AVIATION CORRESPONDENT
17 July, 2005: The Boeing-Airbus slugfest over Indian contracts took a new turn, with Indian Airlines’ proposed purchase of aircraft from Airbus hitting a new roadblock.
The Indian Airlines board had okayed the state-run airline’s plan to buy 20 Airbus A-319s, 19 A-321s and four A-320s, but the finance ministry has now raised an objection to the $2.2 billion deal. It wants the airline to renegotiate with the European aircraft maker to get a better deal. The ministry thinks that the deal was a bit inflated, media reports.
This fresh twist to the airline’s ambitious fleet acquisition programme was revelaed to the media by none other than Union Civil Aviation Minister Praful Patel.
A new panel of experts is likely to be appointed to re-examine the contentious issue after Prime Minister Manmohan Singh returns from his US tour on June 20.
The fleet acquisition proposal has been under consideration for more than two years now. After the NDA governmet was voted out, the
Indian Airlines had to start the process again following a directive by the new dispensation at the Centre.
Indian Airlines, which was the country’s largest domestic carrier, has been outsmarted by the country’s largest private airline, Jet Airways, mainly due to the delay in flight acquisition.
India is currently witnessing an aviation boom. Analysts have predicted a 20% growth per year in aviation sector for the country.
Air India plans to come out with an Initial Public Offering by the end of this year to fund its ambitious fleet expansion programme. Kingfisher is also mulling an IPO, although dates have not been specified.
Jet Air was the first Indian airliner to come out with a highly successful initial public offering, earlier this year.
Low cost private airlines have been busy eating into India’s low-end segment, mainly wooing the rail passengers with dirt-cheap rates. Air Deccan, Kingfisher and Spicejet have all started operations while MagicAir, Go Airlines and IndiGo are soon set to hit the skies.
BY OUR AVIATION CORRESPONDENT
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