IA's fleet purchase delayed amid lobbying by aircraft makers

Wednesday, 18 September 2002, 07:00 Hrs
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NEW DELHI: Indian Airlines' plan to buy 43 aircraft from Airbus Industrie has hit a roadblock, with the ministry of civil aviation reportedly coming under pressure to hand the deal to the U.S.-based Boeing.

The state-owned domestic operator had approved in March its biggest fleet acquisition plan, of buying 43 aircraft worth $ 2.2 billion over the next five years.

Hectic lobbying by two main aircraft manufacturers of the world, Boeing and Airbus, has delayed a decision by the government.

"The IA board meets Thursday to discuss the subject," an airline official said. "The government may take a few more months to arrive at a decision."

But the official said a deal of this magnitude was "bound to take some time" for fruition.

The IA board had referred its decision in March to the ministry of civil aviation. But nearly six months since then, there has been no further progress. Civil Aviation Minister Syed Shahnawaz Hussain is currently visiting the U.S.

The airline, which last purchased planes in 1989, wants to replace an ageing fleet of eight Airbus 300s and 11 Boeing 737s. Its technical evaluation committee had preferred Airbus Industrie to the Seattle-based Boeing Company.

Both Boeing and Airbus had submitted bids for the deal, but the June 30 deadline for the validity of financial offers was extended amid reports that Boeing had offered a price cut.

Boeing has evidently not given up the contest with senior U.S. officials reportedly trying to prevail upon the Indian government to decide in its favour, against the France-based Airbus, the world's second largest passenger jet maker.

U.S. Ambassador Robert Blackwill has met Minister Hussain twice, and Boeing has figured in the long discussions.

Former U.S. under-secretary of state for political affairs, Thomas Pickering, now the Vice-President of the Boeing Corporation, also called on officials in India.

In accordance with the cabinet decision that such deals have to reckon with India's strategic relations with countries, the civil aviation ministry faces pressure to overrule technical grounds of evaluation.

After the ministry, the IA plan had to be approved by the pre-Public Investment Board, then the Public Investment Board and finally the cabinet.

Senior airline officials admit it may take more time before the airline finally sees new aircraft in its fleet.

Source: IANS
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