India Says Airbus Deal May Be Reviewed

The Indian government may ask the country’s two state-run carriers to re-examine deals worth a few billion dollars to buy 53 planes from Europe’s Airbus, the new civil aviation minister said on Monday.

But Praful Patel also said a decision would be taken soon, enabling Air India and Indian Airlines, whose ageing and small fleets are hindering their growth, to finish acquiring the aircraft in 2004.

“I have just taken over, I have to see what has happened,” he told reporters on the sidelines of a news conference. “I may refer it back to them, saying that in view of the overall circumstances… give us a fresh proposal.”

Boeing, which Airbus overtook as the world’s top commercial plane maker in 2003, is still lobbying for the orders, which are crucial to both companies as they battle a global industry slump.

“In view of the competition, in view of the changed circumstances, let [the airlines] have a long-term view,” Patel said. “If they say the same thing is fine for them, we may accept it.”

The boards of the largely domestic Indian Airlines and international carrier Air India have approved plans to buy the aircraft from Airbus, but the contract has not been signed as they were waiting for the government’s approval early this year.

Airbus has said it is ready to negotiate prices before the contract is signed.

Air India also announced over the weekend that it would launch a discount airline, called Air India Express, in April 2005 that will fly to the key Gulf and Southeast Asian markets using a fleet of 14 leased Boeing 737-800 planes.

“Under no circumstances will we allow any more delays in fleet acquisition,” Patel said.

He also said the government would announce on Wednesday a schedule for modernizing and restructuring Bombay and Delhi airports, including inviting private participation.

(Reuters)
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Source: http://news.airwise.com/stories/2004/05/1086031574.html

New government, new minister, lets see what does he do.