MUMBAI: The Board of Air India approved a plan for acquisition of 50 Boeing aircraft at its meeting held here on Tuesday. The total cost could be in the region of Rs. 30,000 crores (over $6 billion) prior to negotiations with the manufacturers of airframe and engines.

The Board also accorded an in-principle approval to Air India for an Initial Public Offering (IPO), subject to government approval.

Jitendra Bhargava, Director, Public Relations and Human Resource Development, Air-India, told The Hindu: "Air-India is very keen to expand and we had several aircraft on lease earlier. The acquisition plan is of great significance to us because we cannot delay our expansion plans any longer."

The plan was approved after examination of the recommendations of the in-house Techno-economic Committee.

The plan is subject to government approval.

The company envisages buying eight B777-200LR Medium Capacity Ultra Long Range aircraft in three-class configuration; 15 B777-300ER Medium Capacity Long Range-350-seater in three class configuration and 27 B787 Medium Capacity Long Range-250-seater in two class configuration when the plan comes through.

Referring to press reports alleging that Air-India made changes after issuing the request for proposal, the company reiterated that no change had been made.

Delivery schedule

The Board took note of the fact that there were likely to be spillovers in the delivery schedules for one or more aircraft. In any case, the final delivery schedule could be decided only after the Government's approval is obtained and the orders are placed.

Both the U.S. and French Governments have been pitching in for the bid with the Indian Government as the deal was considered crucial, especially after Indian Airlines opted for a mixed fleet of 43 Airbus aircraft, which is awaiting the approval of the Union Cabinet. Air India is negotiating with banks to finance the purchase. On Monday, the Civil Aviation Minister, Praful Patel, said the Cabinet would rely on the judgment of the Air India board on which aircraft to buy. "The board is independent to take the decision and we are in no way involved in it as it is a techno-economic decision."

Private airlines such as Jet Airways, Sahara and Deccan are planning fleet expansion as the country's aviation sector is poised to take off after the Government allowed them to fly on international routes.

The number of air travellers in India rose by 26.5 per cent in the six months up to March with 18.52 million people boarding flights. The number of passengers is expected to hit 50 million in the next five years as new private airlines take to the skies.

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