Days ahead of the crucial second meeting of the joint working group on implementation of the July 18 Indo-US statement, the Government today okayed Air India’s decision to purchase 68 Boeing aircraft. One of the biggest aviation deals—currently valued at around Rs 38,000 crore ($8.1 billion)—it will, however, get its final approval after a last round of negotiations by an Empowered Group of Ministers to be constituted by Prime Minister Manmohan Singh.The process is not expected to take more than a week. A similar process had been adopted for Indian Airlines when its purchase of 43 Airbus aircraft was cleared.According to Civil Aviation Minister Praful Patel, the Government was keen on negotiating a ‘‘better deal’’ and it was his ministry that had made the suggestion for an EGOM after the positive fallout of such an effort in the Indian Airlines case.Air India proposes to buy 50 aircraft—8 Boeing 777 ER, 15 Boeing 777 LR and 27 Boeing 787 Dreamliners—to augment its fleet and 18 Boeing 737 800s for Air India Express, its low cost carrier for the Gulf sector. In negotiations with Boeing, it has been agreed that the planes for Air India Express will be delivered by the end of next year.The green signal by the Cabinet today is significant as it comes days ahead of Foreign Secretary Shyam Saran’s departure to Washington. He leaves on December 20 for the second round meeting of the JWG for implementation of the July 18 joint statement, particularly the nuclear deal.Saran will be holding talks with counterpart US Under Secretary for Political Affairs Nicholas Burns to take the nuclear deal forward. US President George W Bush had personally nudged Prime Minister Manmohan Singh to consider purchase of more Boeing aircraft in the past.Given that IA’s plans for 43 Airbus aircraft took over six years to materialize, the Maharaja’s proposal has moved faster with the entire process reaching conclusion in a year’s time.Going by the current schedule, Air India should have inducted all these aircraft by 2012 given that the Dreamliners are to be launched in 2008. AI Express apart, the Maharaja’s own fleet will stand at 74 then. From its current fleet of 41 aircraft, it will phase out all the leased aircraft as well as four Boeing 747s and eight Airbus 310s. These plans are in line with AI’s larger project to revitalize the airline and attain a growth rate higher than what the market records over the next six years.
