I-A to raise $540 mn to buy 10 planes

State-run carrier Indian Airlines will avail a $540 million loan from Germany's national bank KFW to fund acquisition of the first ten aircraft of the total 43 the airline will buy from European maker Airbus in four years, CMD V Trivedi.

The first plane is scheduled to join the fleet around mid-October. It will be after a gap of 16 years that the airline would add new planes to its fleet.

"The airline's board has approved availing the loan from Germany's KFW. This amount will be for buying the first ten aircraft," Trivedi said. The loan repayment tenure is 15 years, he said. Indian Airlines has also raised $150 million from ICICI Bank, for pre-delivery payment for these ten aircraft.

The 43 planes will cost the airline an estimated $2.2 billion.

The airline will buy a mix of 19 Airbus 319s (122-seater), four A321s (140- seater), and 20 Airbus 320s (172-seater). In 2006, the airline will receive only one plane. Starting June, the airline expects delivery of six more aircraft, barring in September.