The Telegraph
Since 1st March, 1999
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Takeoff signal for Alliance Air lease plan

New Delhi, Nov. 10: The government may permit Alliance Air to dry lease aircraft to replace its rickety and ageing fleet of Boeing 737-200s.

Civil aviation minister Rajiv Pratap Rudy today said, “A proposal for Alliance Air to replace its ageing fleet through the leasing route is under government consideration.”

Though Indian Airlines, which owns Alliance Air, wants to buy short haul Airbuses to replace eleven 20-year-old B737s as part of a bigger order of 43 aircraft, the government has been taking its own time in finalising this purchase. Hence the need to go in for dry leases.

Air-India’s plans are more modest. It wishes to order a mix of Airbuses and Boeings to increase fleet size by 28. While the decision has been taken after several rounds of committee and board meetings recommending the same purchases, a final decision by the government is not expected soon.

With state elections round the corner and the national elections next year, the government is unlikely to take the political risk involved in the purchase decisions. Defence and aircraft acquisitions have traditionally been cause for opposition parties to cry wolf and allege misappropriation of funds.

The Bharatiya Janata Party (BJP) had in 1980s and 1990s objected to similar airbus purchase deals. However, Rudy said the government was processing the purchase recommendations of the two airline boards.

Rudy also said the government is considering giving productivity-linked incentives to the employees of Indian Airlines, but the final decision rests with the airline board.

Rudy said, “The employees will have to work more to earn more.” The airline staff has been demanding productivity-linked incentives for all.

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