IA expansion plan on track

The uncertainty over the presentation of a full Budget is unlikely to stall the Rs 10,089-crore fleet acquisition plan of Indian Airlines. The Public Investment Board (PIB) was scheduled to meet on January 8 to discuss the acquisition proposal, official sources said today.

The Planning Commission had last week sent its comments to the finance ministry about the proposed fleet acquisition plan. There have been preliminary meetings between the finance and civil aviation ministries on the issue of providing a government guarantee to the carrier. A government guarantee would help the carrier borrow funds from abroad.

Indian Airlines cannot tap overseas markets on its own as it has negative net worth, with Rs 196.56 crore losses in 2002-03.

Officials in the ministry of civil aviation said in the light of the Naresh Chandra Committee's report on on civil aviation policy, which recommended the acquisition of new aircraft to enable speedy privatisation, the chances of the proposal getting an approval were better. Once the PIB approves it, the proposal will be placed before the Cabinet for a final decision.

In March 2002, the Indian Airlines board had approved the acquisition of 43 aircraft of the Airbus A-320, A-319 and A-321 models. The pre-PIB meeting for the fleet acquisition had been held in April this year.

Sources said the commission had said since the state-owned carrier's net worth had turned negative, it would be very difficult to raise the finances required to fund the buying plan.