Ai To Finalise 200-Seater Aircraft Purchase By March

Air India (AI) will finalise the purchase of three 200-seater aircraft by March. The final offers received from aircraft manufacturers Airbus Industrie and Boeing Airline Company were opened on Monday.

The negotiating committee set up for selecting the aircraft will have a choice between Airbus aircraft A-310 and Boeings B767-200, both of whom are in the race for the $ 180 million-200 million order.

Air India already has eight A310s in its fleet consisting of 28 aircraft. Three more A310s were on option and, as per the fleet acquisition programme, it had intended to confirm acquisition of two B747-400s and two A310-300s.

 

However, during a recent board meeting, some of the board members asked the airline to seek a proposal from Boeing before placing a firm order.

Airbus has claimed that commonality in AIs fleet will lead to a cost saving of around Rs 100 crore for all the three aircraft while Boeing has said that its B767-200 is a more efficient aircraft.

In another development, the airline has pruned the number of aircraft required for medium capacity long range (MCLR) to between five and seven from 10. The decision to cut the MCLR aircraft fleet was taken on account of mounting losses incurred by the airline.

The airline has also decided to pull out of several loss-making routes in an attempt to cut losses.

The stations which the airline plans to discontinue services include Seoul where the currency crisis affected AIs operations, South Africa and Japan.

But the airline will increase services to the Gulf, Chicago and Manchester as these routes bring maximum revenue for the airline.

According to AI officials, the south-east Asian crisis and the airfare war involving some foreign airlines had put the airline back by nearly Rs 100 crore.

The other factors affecting its profits were the increase in aviation fuel costs, higher operational costs and depreciation of the rupee by around 11 per cent against the dollar.

Hence the airline had decided to rationalise its routes and concentrate only on those routes which were cost-effective and profitable.