The Hindu Business Line : AI signs deal for 68 Boeing aircraft — Boeing to invest $185 m for various facilities

The Civil Aviation Minister, Mr Praful Patel, flanked by the President & CEO of Boeing Company, Mr Alan Mulally, and the Chairman & Managing Director, Air India, Mr V. Thulasidas, at a press conference in Mumbai on Wednesday. - Paul Noronha

Mumbai , Jan. 11

AIR India today signed an agreement with Boeing for the purchase of 68 aircraft at an estimated cost of Rs 35,000 crore.

The list price is $11billion (about Rs 48,700 crore) but the airline had negotiated the price, Mr Praful Patel, Minister of State for Civil Aviation, said today.

Under the deal, the largest in Indian aviation, Boeing is committed to investing $100 million in setting up an MRO (maintenance, repair, and overhauling) facility, $75 million in a pilot training institute, and $10 million in other facilities.

In addition, a counter-trade agreement entails Boeing Company to buy goods and services worth Rs 8,500 crore from Indian companies.

The order comprises 50 long and ultra-long range medium-capacity aircraft for AI and 18 B737-800s for AI's low-cost subsidiary, AI Express.

The 50 aircraft scheduled for delivery to AI in a phased manner beginning November 2006 will comprise 27 B787-8 Dreamliners, eight B777-200 LR aircraft, and 15 B777-200 ERs.

Mr V. Thulasidas, Chairman and Managing Director, AI, said the agreement marked a major stride in the national carrier's quest to become a global player.

"The delivery of the aircraft will enable AI to modernise its fleet and expand its route network. Passengers will have a choice of several new routes and will enjoy the most modern amenities in the new aircraft," Mr Thulasidas said at the press briefing here today.

The new fleet would bring in cost savings and reliability and give AI and AI Express a competitive edge, he said.

He added that AI had placed firm orders for the aircraft, rather than going in for options.

Mr Patel said he was bullish about the Indian aviation scenario. With improved infrastructure, Indian aviation could register 25 per cent compounded annual growth over the next 10 years, he said.

He told reporters that the modernisation programme for Delhi and Mumbai airports was on track and successful bidders for both projects would be selected by January 31.

Mr Alan R. Mulally, President and CEO, Commercial Airplanes, Boeing, said the company had received more orders than rival Airbus in 2005. The US-based aircraft maker received 1,029 airplane orders last year, and Mr Mulally said he expected 2006 to be an exciting order year as well.

Later, Mr Thulasidas said that AI's route expansion was likely to include a flight from Kerala to Europe.