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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 got the approval of the Prime Minister today. The Carrier will now be acquiring a fleet of 43 Airbus aircrafts, a mix of A319s, A320s and A32s to replace its ageing fleet. This was informed by the Minister for Civil Aviation Shri Praful Patel while addressing a press conference here today.
The Minister says that in the entire process 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 yesterday by the Empowered Group of Ministers, headed by the Finance Minister and including the Law Minister, Minister for Statistics and Programme Implementation and the Minister for Civil Aviation, 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 Industrie shall establish spare-parts, ware houses 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 alongwith other promoters which will result in an investment of $ 100 million.
The Minister asserted that the price that has now been offered to Indian Airlines is very competitive. Equally importantly Airbus industry has also included the “Integrity” clause and the “Most favoured” clause in the deal. The Minister says that this was very well negotiated deal and a good deal for the airlines.
Indian Airlines can now place order for the planes. The first plane is expected to reach India in the middle of 2006 to be followed by one plane every month.
MC/SK/RS
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