The Hindu Business Line : IA's Airbus acquisition plan: CCEA nod sought for setting up panel

TO give a push to the Airbus aircraft acquisition plan, the Ministry of Civil Aviation has moved a note to the Cabinet Committee on Economic Affairs (CCEA) seeking its nod for setting up either a Group of Ministers or a Committee of Secretaries to examine the Rs 10,000-crore proposal.

"The note for the CCEA approval has been moved today. The issue should be taken up by the CCEA soon," the Minister told newspersons here today.

The issue has been pending since March 2002 when the proposal to acquire 43 aircraft was cleared by the airlines Board. The Public Investment Board also cleared the proposal in November last year.

The move to set up another committee to consider the price at which Indian Airlines was acquiring the aircraft was mooted after some Parliamentarians raised questions as to whether the European aircraft manufacturer had quoted a lower price for a similar deal to an airline in South East Asia.

The Minister said the Ministry has again urged the Finance Ministry to extend the exemption on withholding tax for leased aircraft beyond September 30. The imposition of tax will increase the lease cost of an aircraft by almost 30 per cent. It could put severe financial pressure on the bottomline of several airlines including Indian Airlines and Air India that are leasing aircraft.

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