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Ministry may club A-I, IA aircraft purchase deal

Rumi Dutta

The civil aviation ministry is weighing the option of jointly negotiating for Air-India and Indian Airlines' mega aircraft acquisition plan.

While the Centre has already finalised its plans for acquiring 43 aircraft from the European aircraft manufacturer Airbus Industrie for Indian Airlines, it is yet to take a call on the aircraft acquisition plans for A-I.

Roy Paul, Union secretary of civil aviation, and acting A-I chairman, said, "We will be considering the proposal of A-I and Indian Airlines jointly negotiating for aircraft acquisition. The idea is to gain a bargaining position in the process of negotiating such a mega deal."

While IA will be investing around $2 billion for purchasing 43 aircraft, A-I also plans to invest in excess of Rs 100 billion for buying around 45 aircraft.

"Though we have already finalised with Airbus for acquiring the required aircraft for Indian Airlines, it does not make any difference. We will be considering other players for our balance requirement. We will definitely be gaining grounds in terms of negotiating the deal," Paul said.

According to industry sources, financing should not be a major issue as the loans raised for the proposed acquisition would be guaranteed by the central government. Besides, the recession-hit aircraft manufacturers have thrown open lucrative financing schemes to sell planes in a declining market.

The proposed expansion of fleet of the two national carriers is part of a major restructuring exercise after their respective divestment programmes had to be put on hold following the September 11 tragedy.

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