IA to acquire aircraft after elections

Indian Airlines' Rs 10,000-crore aircraft acquisition proposal may materialise only after the elections are over.

The crucial Public Investment Board (PIB) meeting last week to consider the IA Board decision for acquiring 43 planes from Europe's Airbus SAS had been put off, with no new date being set for the next meeting.

"Even if the PIB meets over the next few days and clears the proposal, the Cabinet Committee on Economic Affairs (CCEA) meeting to ratify the decision is not expected before February 6," an official said.

While officials gave no reasons for the cancellation of the PIB meeting, they said a rethink on US aircraft manufacturer Boeing's proposal to offer a Rs 700 crore discount on the price quoted by the company during the tendering process was one of the reasons for the delay.

Civil Aviation Minister Rajiv Pratap Rudy had said in the middle of January the Public Investment Board would evaluate the airline's proposal, which would later go to the Cabinet for the final approval.

The board of Indian Airlines, the country's largest domestic carrier, had approved the proposal to buy a mix of 43 Airbus A319, A320 and A321 aircraft as part of a fleet renewal programme in March 2002.

Delays in approving the deal have forced Indian Airlines to lease aircraft to defend its declining market share.

European Aeronautic Defence and Space Co NV, based in Germany and France, holds majority stake in Airbus. British defence specialist firm BAE Systems Plc owns 20 per cent of the aircraft manufacturer.