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The Cabinet Committee on Economic Affairs today noted and approved the EGOM decision on fleet acquisition plan of the public carrier Indian Airlines. With the approval of the CCEA, the Ministry of Civil Aviation will now give the go ahead to Indian Airlines to get the aircrafts.
After a gap of 15 years the fleet acquisition plan of the public carrier Indian Airlines has got the approval of the Government. The plan was deliberated in details by the Empowered Group of Minister headed by the Finance Minister and including the Law Minister, Minister for Statistics and Programme Implementation and the Minister for Civil Aviation, on 6 September 2005. It got the approval of the Prime Minister on 7 September 2005. The Carrier will now be acquiring a fleet of 43 Airbus aircrafts, a mix of A319s, A320s and A32s to replace its ageing fleet.
There were two rounds of price negotiations with the aircraft manufacturing company Airbus Industrie. Substantive saving of price was achieved in these two rounds. In the first round of price negotiation which was held in March 2005 by the Oversight Committee headed by Shri C.G.Somaiah, Indian Airlines got a saving of $ 32 million. In the 2nd round of price negotiation held on 6th September, 2005 by the Empowered Group of Ministers, the EGOM could secure a further direct concession of $ 75 million amounting to Rs. 349 crores. Thus the net cost of Rs. 10237 crores was brought down to Rs. 9890 crores yesterday amounting to a discount 3.4%.
There were several other concessions that the EGOM managed to get:
Counter trade and off sets by both Airbus and engine manufacturer CFM was increased from 30% to 40%. This will result in an increase of trade opportunities worth $ 145 million for India with France.
Airbus will now set up an ultra modern training centre for pilots in India with an investment of $ 75 million. This will go a long way in helping to cope with the growing shortage of pilots.
Airbus Industry shall establish spare-parts, warehouses in India, not only for Indian Airlines but for other carriers as well.
Airbus has given a commitment of setting up MRO (Maintenance, Repair, Overhaul) facility in India along with other promoters which will result in an investment of $ 100 million.
The Airbus industrie has also included the “Integrity” clause and the “Most favoured” clause in the deal.
MC/GK
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