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July 18, 2000
India to buy new planes for Alliance Air
Civil Aviation Minister Sharad Yadav on Tuesday announced that financial closure for the replacement of 12 Alliance Air planes will be completed within the next three to four months, but airline officials said the deadline would be a tough one to meet because of paucity of funds and the fact that aircraft selection had not even been completed.
Emerging from the cabinet meeting, where he gave details on Monday's crash at Patna, the minister told newspersons that the government was determined to expedite the process of purchase of aircraft for Indian Airlines and its subsidiary Alliance Air.
He said that the ministry plans to speed up the purchase of more than a dozen aircraft to modernise the fleet of state-owned Alliance Air.
Sources in the airline, which is in the process of divestment, were not quite sure how the target set by the minister could be met as tying up the financial package with various bankers and other matters would take several months.
Besides, the aircraft to replace the 12 Boeing 737-200s by the year 2002 and 11 A300s have not yet been selected. And with each aircraft costing about Rs 1.5 billion, where would the airline find funds in the region of Rs 34.5 billion, sources wondered.
The aircraft evaluation committee has shortlisted the Boeing 737-600, 717-200 and Airbus 319 to replace the 119-seater 737-200s which were bought for Indian Airlines between 1980 and 1982.
For the A300s, inducted into the airline between 1976 and 1982, the aircraft that the domestic carrier is looking at are the B737-900 and A321 and 320 all of which are 160-plus seaters.
But the larger issue is whether in the background of divestment immediate action will be taken on the report of evaluation committee which is expected in August.
The strategic partner who will pick up stake in Indian Airlines would very much want a say in the kind of aircraft to buy, sources said.
The Boeing 737-200 which crashed on Monday at Patna was to be phased out by the end of the year as per government guidelines which do not allow aircraft beyond 20 years to operate in the skies.
The aircraft was one of the four that was purchased in 1980.
Subsequently, in 1981 and 1982, eight more Boeing 737-200s were inducted into the airline in batches of four each.
The Boeing has been a mainstay of Indian Airlines with the carrier at one time having as many as 30.
While the Directorate General of Civil Aviation does not allow aircraft beyond 20 years to operate in Indian conditions, worldwide some 522 Boeing 737-200s over 20 years old are still flying. United Airlines, the largest in the world has 45 B737-200s which are more than 20 years old.
The manufacturers say that the 737 series primarily a short-to-medium haul plane is the most widely sold commercial jet aircraft in aviation history because of versatility, reliability, fuel-efficiency and cost-effectiveness.
Both Boeing and Airbus have provided information regarding performance guarantee, maintenance guarantee and spares support along with the financial bids.
After a decision is taken by the evaluation committee on which aircraft to buy, it would have to be approved by the Indian Airlines board and civil aviation Ministry before being cleared by the Cabinet.
Since an aircraft is not bought on outright cash-down payment basis, the financial matters regarding purchase are tedious as it involves not one banker but a consortium, the sources said.
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