Boeing slashes bid to trump Airbus for A-I, I-A orders

Boeing, the US-based commercial aircraft manufacturer, has aggressively cut the price to out-bid Airbus Industrie and grab the Air-India (A-I) and Indian Airlines' (IA) Rs 20,000 crore fleet acquisition mandate.

IA alone can save close to over Rs 700 crore if the airline goes for a Boeing fleet instead Airbus planes, a Boeing senior executive said.

This works out to about 7 per cent of the total IA package of Rs 10,000 crore. The company has recently made an informal presentation to the national carriers with a revised bid.

Boeing is willing to offer a lower price to Indian Airlines compared with its arch-rival Airbus' bid price for the 43 aircraft, the executive told Business Standard.

The Rs 10,000 crore fleet acquisition proposal, which envisages acquisition of 43 aircraft from Airbus Industrie, has already reached the cabinet approval stage.

A-I's proposal to acquire 10 long range Airbus 340 and 18 short range Boeing 737-800 aircraft has not yet advanced to the cabinet decision stage.

The IA board had approved the proposed expansion plan in 2001 while A-I's fleet acquisition plan was approved by its board in 2003.

Speaking to Business Standard, Dinesh Keskar, senior vice-president (sales) of Boeing Commercial Airplanes, said: "The aviation industry scenario in India has changed drastically ever since the fleet acquisition plans of IA and A-I were finalised. We have presented a compelling business case as to why A-I should go for Boeing 777 instead of the A340 aircraft. In case of IA, the airline would be saving close to Rs 700 crore if it changes its preference to a new Boeing fleet."

Boeing has presented the case history of Singapore Airlines which had bought A340-300 to meet its long range requirements.

Keskar said Boeing later had bought back the Airbus plane and had refurbished Singapore Airlines' fleet with the B777 family.