Indian Airlines may beef up fleet with 100-seaters

New Delhi, Dec 8: Indian Airlines (IA) has outlined plans to purchase five to six new 100-seater aircraft in a deal costing Rs 550 crore ...

New Delhi, Dec 8: Indian Airlines (IA) has outlined plans to purchase five to six new 100-seater aircraft in a deal costing Rs 550 crore to Rs 600 crore. It is considering the Boeing 737-600 and the Boeing 717-200 from the US-based Boeing company’s stable for the deal. The France-based Airbus Industrie’s Airbus A 318 is also in the race.

"The evaluation work for the purchase has started and we hope to complete it by May next year" IA managing director PC Sen said.

The aircraft purchase will be partly funded by the Rs 125 crore financial bail-out package promised by the government. IA has received an assurance from the finance ministry that the funds will come through in another month or two.

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The remaining part of the the aircraft purchase will be financed through long-term loans. Sen declined to comment on when the airline will be in a position to place a final order for the aircraft.

IA has set-up an in-house committee to vet the aircraft deal. The committe is headed by IA’s deputy managing directorJRD Rao. Its other members are NC Ghosh, director, finance, Ashok Bhushan, director, planning, and Amitabh Ghosh, director, projects.

The aircraft models which are being evaluated for the deal are the latest offerings from Boeing and Airbus and will be in the market only by 1999 or 2000. However, IA can place an order for these aircraft when it wishes.

The new 100-seater aircraft will serve as replacement for IA’s ageing fleet of Boeing 727-200s. IA has 12 such aircraft in its fleet. The airline plans to sell-off the older aircraft as they get replaced by new ones.

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IA had drawn-up ambitious plans to renew its ageing fleet nearly a year ago but as it lacked the necessary funds the plans were dropped.

Once the renewal of the Boeing fleet is complete, IA plans to renew its fleet of ten A-300s. The financing for this will be possible only if IA gets the complete, primarily government funded package of Rs 1,000 crore recommended by the Kelkar commitee report.

The move by IA to purchase new aircraft isbound to be followed with keen interest by rivals Boeing and Airbus. The two aircraft manufacturers have remained upbeat about the Indian market despite the lack of fresh orders from the state-run airlines.

Boeing and Airbus fought a pitched battle for Air India’s much-touted $3 billion contract for medium capacity long range (MCLR) aircraft which utimately did not see the light of day.

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It is expected that Air India will also go in for new aircraft if the government comes to its rescue.

According to market forecasts prepared by Airbus, India’s national carriers and private airlines will need to acquire 215 aircraft worth $18.6 billion between 1998 and the year 2017, so as to replace ageing aircraft and provide for growth.

The new aircraft will be split between the single-aisle category, and widebodies.