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Indian Airlines Selects Airbus Worth $2.25B

Fri Mar 29, 2002 12:42 am

INDIAN AIRLINES WANTS AIRBUS PLANES WORTH US$2.25bn

By Chris Jasper

New Delhi, March 27 (Bloomberg) -- Indian Airlines, the country's No.
1 domestic carrier, said it wants to buy 43 Airbus narrow-body planes
for $2.25 billion after evaluating bids from the European planemaker
and U.S. rival Boeing.

The airline's board wants to buy a mix of Airbus A320-series aircraft
for delivery between the 2004 and 2008 fiscal years, said Ashok
Sharma, a spokesman for the New Delhi-based airline.

"The board took the decision today after receiving a report from our
technical-economic evaluation committee," he said. "It's now for the
government to decide the issue."

State-owned Indian Airlines is revamping its fleet after bidders
failed to buy the airline last year. The government, which owns both
the domestic carrier and long-haul airline Air India, gave the go-
ahead for aircraft purchases last November, overturning restrictions
in place since 1994.

The board's recommendation on the Airbus order will now go to India's
Ministry of Civil Aviation for approval, Sharma said. He couldn't say
when the process would be completed.

"This is great news for Airbus and the A320 family," said an Airbus
spokeswoman. The Toulouse, France-based company, the world's No. 2
planemaker after Boeing, won 274 new orders last year. Airbus
delivered 325 planes last year and forecasts 300 deliveries for this
year.

Catalogue Price

The price quoted by Indian Airlines for the planes -- an average $52
million -- was probably based on the catalogue value, the Airbus
spokeswoman said. The advertised cost of A320-series planes ranges
between $48 million and $72 million.

Airlines have been paying less than advertised rates since the Sept.
11 attacks as demand for new planes slowed.

Indian Airlines wants to order Airbus A319s, A320s and A321s, seating
from 122 to 172 people, Sharma said. All the planes would be powered
by engines from CFM International, a partnership between General
Electric, the biggest enginemaker, and state-owned Snecma of France.

The new planes would be used to replace Indian Airlines' 11 aging 250-
seat Airbus A300 wide-body planes, and to allow for network
expansion, the Airbus spokeswoman said. The carrier already operates
some A320s, she said. Using more of the same type of plane reduces
operating costs.

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