My Account Menu

CAPA Login

Register to trial CAPA Membership!

Indian govt wants 2.2 bln usd order for 43 Airbus planes re-examined -minister


NEW DELHI (XFNews) - The government wants a planned 2.2 bln usd deal to buy 43 Airbus passenger aircraft for state-run domestic carrier Indian Airlines re-examined, Civil Aviation Minister Praful Patel said.

The Indian Airlines board has already cleared the acquisition of 20 Airbus A-319s, 19 A-321s and four A-320s, but the finance ministry is not satisfied the price is the best possible and has blocked the deal.
Patel said he now wants a committee of experts to be appointed by India's prime minister to re-examine the issue.

"I will write to Prime Minister Manmohan Singh after he comes back from the United States and then he may appoint a committee," Patel told Agence France-Presse.

The minister said the move is to ensure "absolute transparency" in the negotiation of prices.

Singh is scheduled to visit the United States from July 18 to 20.

The proposal to buy the 43 Airbus aircraft has been under discussion for the past two years, as it requires clearance from several layers of the government due to the size of the order.

Delays were compounded when the Congress-led government, which came to power in May last year, asked Indian Airlines to start the process afresh.

Indian Airlines was the nation's largest domestic airlines until three to four years ago, but has lost market share to private airline Jet Airways, which has one of Asia's newest Boeing fleets.

According to industry officials, Indian Airlines has lost even more market share in the past two to three months due to the takeoff of a number of low-cost airlines in India's domestic skies.

Want more analysis like this? CAPA Membership gives you access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find out more and take a free trial.