The government has allowed Indian Airlines to extend by six months its programme of acquisition of 43 aircraft costing Rs 10,089 crore (Rs 100.89 billion), official sources said on Friday.

The airline has also received consent of the two aircraft manufacturers, Boeing and Airbus Industrie, as well as engine maker CFM, among others, to maintain their bids till a further period of six months from March 31, 2003, they said.

The extension comes a few days before the expiry of the deadline for financial bids of the aircraft and engine makers.

This is the fourth time that the government has extended the time limit, with the earlier extensions being granted for three months each. The IA board had last March decided to acquire a mixed all-Airbus fleet of A-319s, A-320s and A-321 aircraft.

The Cabinet Committee on Divestment, which had to strike off IA and Air-India from the list of PSUs to be privatised before they themselves acquire the planes, has also received comments from all concerned ministries and departments, including finance, divestment, commerce and civil aviation, the sources said.

They said the CCD would meet "very soon" to decide on taking out the two airlines from the divestment roster.

After such a decision is taken by the CCD, the IA's fleet acquisition process would enter the pre-PIB (Public Investment Board) stage in which officials of the concerned ministries would vet the proposal from the point of view of its viability and list out options.

The sources said the pre-PIB stage was likely to start next month.

Airbus and Boeing had sent their bids in December 2001, which were opened in the same month.

IA plans to induct the first aircraft in the beginning of the winter schedule in October 2004, if the decision by the Cabinet as well as those at the PIB level were through by the end of next fiscal.

The domestic carrier plans to raise funds for acquiring the 43 aircraft through commercial borrowings from the international and domestic markets.