In what perhaps has been the fastest approval to aircraft purchase, an Empowered Group of Ministers headed by Finance Minister P. Chidambaram sealed the Air India deal for 68 aircraft with Boeing and even obtained a reduction of Rs 1,000 crore in the last round of negotiations today.Air India had already secured a Rs 900 crores reduction which all translates into a total cost of around Rs 3,500 crores. Boeing has also offered to set up MRO (maintenance, repair, overhaul) and training facilities in India at a cost of around $205 million.In negotiations with the EGoM today — that included law minister H.R. Bhardwaj, minister for statistics and programme implementation Oscar Fernandes, civil aviation minister Praful Patel — Boeing also agreed to sourcing materials from India, equal to 30 per cent of the value of the aircraft, which amounts to Rs 8,500 crore.Following the EGoM meeting, which lasted for nearly five hours, the civil aviation minister said the documents would now be sent to Prime Minister Manmohan Singh for final approval.Interestingly, the decision came just around the time India is holding crucial negotiations with the US on the nuclear deal. The US president George W. Bush, who had made a personal mention of India buying more Boeing aircraft to Singh, is also slated to visit India early next year. Of the 68 aircraft, Air India will keep 50 while 18 Boeing 737 800s are meant for its low cost carrier Air India Express. The Maharaja fleet will comprise eight Boeing 777-200 ERs, 15 B777-300 LRs and 27 B787s.The AI board has selected engines for all the 68 aircraft from CFM International. The fleet acquisition proposal for Air India were cleared by the Public Investment Board on October 13.As for training facilities, Boeing will set up four simulators that would cost $75 million and MRO for Boeing aircraft which will be available for around $100 million.
