Mumbai, April 26: Air-India today decided to buy 50 Boeing aircraft valued at Rs 30,000 crore ($6.9 billion) in an attempt to stay far ahead of its domestic rivals that have just won rights to fly abroad.
The company's board met in Mumbai to approve the plan after a detailed examination of the recommendations of the in-house techno-economic committee appointed to examine the bids.
It comes after more than three years of hard-selling and hectic lobbying by Boeing Company and Airbus ' a consortium of European aviation companies. Both aircraft manufacturers had battled hard to win the contract; both persuaded their countries to lobby the Indian government on their behalf.
Air-India had shortlisted two planes ' Boeing's 777 and the Airbus A340 ' for what is touted as one of the biggest deals in Indian aviation history. The lobbying spilled over from the government to the media with diplomatic visits by leading lights to press for their case. French transport minister Gilles de Robien called on civil aviation minister Praful Patel yesterday in a last-minute attempt to swing the deal for Airbus.
But the Americans were not quiet either. US transport secretary Norman Minneta had lobbied for American aircraft maker Boeing.
It was followed by US President George Bush making a telephone call to make a personal sales spiel to Prime Minister Manmohan Singh. In the face of mounting pressure from the US and EU lobbies, the Indian authorities have consistently maintained that the Air-India board has the prerogative to decide on the matter. However, in view of the sizeable foreign exchange amount involved in the deal and also the fact that it is a government-owned airline, the Union cabinet will have to approve the Air-India proposal.
The Air-India board has selected eight B777-200LR medium capacity, ultra long-range aircraft in three-class configuration, 15 B777-300ER medium-capacity long range-350-seater in three-class configuration and 27 B787 medium-capacity long-range with a capacity of 250 seats. It also picked Boeing's newest jet, the Dreamliner, in two-class configuration, prior to negotiations with the manufacturers of air-frames and engines.
For Boeing, the Air-India announcement was a double bonanza. It came one day after Air Canada said it would purchase up to 96 Boeing jets.
Referring to reports appearing in a section of the press regarding alleged changes made after the issue of the request for proposal (RFP), Air-India clarified that 'no changes, whatsoever, were made after issue of the request for proposal'.
The board took note of the fact that there were spill-overs in the delivery schedules proposed by both manufacturers with respect to one or more aircraft. In any case, the final delivery schedule can be decided only after the necessary government approvals have been obtained and orders placed, Air-India said.
The board also accorded an in-principle approval to Air-India's initial public offer (IPO), subject to the approval of the government. If it goes through, it will be second aviation company to list on stock exchanges, after Jet Airways.