India to wrap up Airbus deal in three weeks

By agencies   |   Friday, 26 August 2005, 07:00 Hrs
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NEW DELHI: India will wrap up a $2.2-billion deal to buy 43 passenger aircraft from European manufacturer Airbus in three weeks, Finance Minister P. Chidambaram said.

The planes are being bought by state-run domestic carrier Indian Airlines which is facing stiff competition from rival private carriers with newer aircraft.

"The cabinet has decided to constitute an empowered group of ministers to hold one final round of negotiations for the purchase of 43 Airbus aircraft," he said.

Chidambaram said the group was being formed because there were "still one or two gray areas which need to be addressed."

The discussions would be conducted "in a time-bound manner so that we can conclude this very, very quickly," Chidambaram said after a meeting of the union cabinet.

Asked how soon the deal could be finalized, the minister replied: "It could be as short as three weeks."

The Indian Airlines board has already cleared the acquisition of 20 Airbus A-319s, 19 A-321s and four A-320s.

The purchase of the Airbus aircraft has been dogged by delays.

Indian Airlines mainly flies to domestic destinations but also has flights to nearby countries as well as to the Middle East and Southeast Asia.

The carrier used to be the nation's largest domestic airline but has lost market share to private airline Jet Airways, which has one of Asia's newest Boeing fleets.

Industry officials say Indian Airlines has lost even more market share in recent months due to the takeoff of a number of low-cost airlines in India's domestic skies.

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