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Boeing's Rs 700 crore rebate to IA, A-I

August 31, 2004 15:31 IST

Boeing Commercial Airplanes on Tuesday offered to replace the aircraft leased by Air-India from South Korea with new generation ones at a 'great price' and said Indian Airlines would save over Rs 700 crore (Rs 7 billion) if it bought planes from it.

"We have made a proposal to A-I to replace the aircraft it has leased from South Korea with new generation planes. It will be a great solution at a great price," Boeing's President Aircraft Trading Dinesh Keskar said.

He said B-747s would be replaced by similar aircraft with "new interiors of B-777s and private televisions on each economy class seats." The lease of the Korean Boeings expires in 2006-07.

On the offer to Indian Airlines whose proposal to acquire 43 Airbus 319s, 320s and 321s is currently being vetted by the government, Keskar, who is also Boeing's vice president (sales), said: "Our offer of Rs 700 crore rebate continues to stand."

Boeing has been making this offer for the past few years to woo IA into buying its planes.

Elaborating on the 'competitive advantages' Indian carriers would gain by operating Boeing jetliners, Keskar said the B 777-200 extended range and long range versions would be the 'right choice for A-I to increase its market share, enhance passengers' flying experience and maximise profitability.'

To questions on the two public sector carriers reportedly being asked to review their fleet plans, the Boeing official said this was a 'pragmatic approach' as products and prices were changing and new models and newer choices were available in the market.

Referring to A-I and IA's programmes to induct capacity by leasing aircraft, he said the Indian carriers would have to enhance capacity as Air-India and Indian Airlines together accounted roughly for less than 25 per cent of the passenger traffic from India.

Asked about higher lease cost for Boeing airplanes, Keskar said though lease prices were higher, 'what matters is the total package.'

He quoted the example of Singapore Airline which has recently signed an agreement to buy 31 B 777-300 (extended range) aircraft saying the deal would lead to higher operating efficiency and lower costs.

Without mentioning its competitor, European consortium Airbus, Keskar said any dealing with European firms would incur more costs with Euro appreciating by about 30 per cent.

On the growing number of low-cost carriers coming into the Indian market, he said while the low fares were hitting the bottomline of the airline yields, the number of passengers was increasing.

"It is a good sign that India is registering over 10 per cent annual growth in passenger traffic, making it one of the fastest growing markets," Keskar added.

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