PIB Approves Aircraft Acquisition By AI

ET&T Staff - Mumbai

The Public Investment Board (PIB) has recommended acquisition of 50 new long-range, wide-bodied aircraft for Air India and 18 B737-800W aircraft for Air India Charters Ltd, (AICL). This is on a not-to-exceed-cost basis to the government with a sovereign guarantee.

The total cost of these aircraft and related infrastructure is estimated to be about Rs 35,000 crores, prior to negotiations with the manufacturers of air frame and engines. The final project cost will be revealed only after completion of negotiations with the airframe/engine manufacturers. This will be the single largest order by the airline ever since it commenced operations in 1953 under the Air Corporations Act.

Air-India, which currently has a fleet of 42 aircraft, has been acquiring them on dry lease to ensure that it continues to get a share of the fast growing market. Air-India has inducted 24 aircraft on dry lease as of date including three for Air-India Express.

The deliveries are likely to commence from 2006-end. Financing arrangements for the acquisition of these aircraft will be tied up to meet the pre-delivery commitments up to 15 per cent of the cost of the aircraft.

Air-India proposes to introduce non-stop flights to New York and Chicago with the induction of the new generation ultra long range aircraft as well as add new destinations to its route network.