The Telegraph
Since 1st March, 1999
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Please-all plane purchase programme

New Delhi, Feb. 7: The Indian government has decided to split its total aircraft purchase order of 79 aircraft for its two national carriers and VIP squadron between Airbus and Boeing.

Prime Minister Atal Bihari Vajpayee will indicate to French Prime Minister Jean Pierre Raffarin that the Indian Airlines order of 43 medium range passenger jets will go to Airbus, the European aircraft manufacturing conglomerate, provided the final prices are right.

IA wants to buy a mix of Airbus-319s, Airbus-320s and Airbus-321s at a cost of over Rs 10,000 crore. These aircraft are to be delivered over four years between 2004 and 2008. Vajpayee will, however, indicate that the bulk of the order for long-range jets being bought by Air-India will go to Airbus’ arch rival Boeing.

The US-based aircraft maker will also build six high security jets for the VIP squadron which will be used by the President, Vice-President, Prime Minister and his deputy, besides visiting heads of state. This means 10 long range Boeing 777-ERs can be expected to be picked up by Air-India. Orders for 18 short-range aircraft for A-I are, however, likely to be split between Boeing 737-900s and Airbus 321s.

Although these decisions are yet to be ratified by the Cabinet and there are grumblings within the finance ministry on the issue, the Prime Minister’s Office has let the civil aviation ministry know that it feels this would be the best way to keep both the US government, on the one hand, and the French, British and German governments who are partners in the Airbus project happy.

The US government has also been aggressively lobbying for the Boeing Corporation with the likes of Secretary of State Colin Powell throwing his weight behind the aircraft giant’s bids.

However, a final decision by the Cabinet will come only after a meeting of the Cabinet Committee on Disinvestment has formally turned down an earlier recommendation to sell off these airlines.

Civil aviation minister Shahnawaz Hussain does not feel that the time is ripe to privatise the airlines given the current state of the aviation economy where most potential buyers — global airlines — are themselves reeling under financial crises and would in all probability not be interested in fresh investments abroad. This feeling seems to have been shared by the disinvestment ministry in the recent past.

Meanwhile, at Bangalore, Airbus’ senior vice-president Dinesh Keskar said, “We are willing to work with Indian Airlines and offer price reduction.”

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