India approves purchase of 43 Airbus jets for 2.2 billion usd


NEW DELHI (XFNews) - The government has approved the purchase of 43 planes from the European aircraft maker Airbus Industrie for state-run Indian Airlines for 2.2 bln usd, Prime Minister Manmohan Singh said.

"Our government has announced today the purchase of 43 Airbus aircraft worth 2.2 billion dollars," Singh told a press conference after talks here with European Union leaders led by British Prime Minister Tony Blair.

The Indian Airlines board had agreed on the acquisition of 20 Airbus A-319s, 19 A-321s and four A-320s more than two years ago but a final decision had been delayed by required clearances from several layers of the government because of the order's size.

A ministerial panel led by Finance Minister P. Chidambaram held final price negotiations yesterday with Airbus for the purchase of the 43 planes.

"We all know that the Airbus has been highly successful aircraft around the world," Blair said, adding that the purchase is a welcome sign of growing trade relations between the EU and India.

India has seen intense competition between Airbus and Boeing recently for aircraft orders.

"We are very happy... but there is no exultation. The contract should have been announced a long ago. The discussions have taken an extremely long time," a European source close to the Airbus talks told Agence France-Presse.

"Compared to the decision of Air India (AI) one continues to be struck by the difference between the two contracts -- 2.2 billion for the Airbus for Indian Airlines, against seven billion for the Air India Boeing (deal).

"And the choice of AI remains surrounded in mystery," the source said.

In April, Airbus executives in India complained that the government had favored US rival Boeing which won a 7 bln usd contract for 50 long-range 787 aircraft from state-run international carrier Air India.

The contract remains subject to federal government approval.

Indian Airlines mainly flies domestic routes but also serves to some regional, Middle Eastern and Southeast Asian destinations.

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