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Centre approves purchase of 43 planes from Airbus

     New Delhi: The Centre on Thursday approved the purchase of 43 aircraft from French plane manufacturer Airbus at a renegotiated price for the Indian Airlines to replace its ageing fleet. The deal came after last minute bargaining with Airbus by a ministerial panel that resulted in a saving of 75 million dollars. "Cabinet approved the decision of the empowered panel of ministers for the purchase of 43 airplanes from Airbus after further concessions were negotiated with Airbus industries," Finance Minister Palaniappan Chidambaram told reporters. Prime Minister Manmohan Singh had announced during British Prime Minister Tony Blair's visit this month that the Government had cleared the purchase of the aircraft from Airbus for nearly 2.2 billion dollars. Indian Airlines will receive the first aircraft by September 2006 and the airline will receive a plane after one month of that deal.

    Analysts said the deal would boost the fast-growing aviation market in India, which has seen several private carriers start operations in the past year. Passenger traffic is expected to grow 20 per cent a year until 2010. Indian Airlines, which has several Boeing Co aged between 20-25 years, will receive a mix of short-haul and medium-haul Airbus A319, A320 and A321s. The deal will allow Indian Airlines to retire older jets as it tries to win back market share from nimble private carriers such as Jet Airways and recently launched Kingfisher Airlines, owned by brewing baron Vijay Mallya. In April, Airbus rival Boeing bagged an intensely fought 6.9- billion-dollar order for 50 long-range aircraft from Air India. But Airbus, 80 per cent owned by the European Aeronautical Defence & Space Co. N.V. (EADS) and 20 per cent owned by Britain's BAE Systems Plc, signed a 3-billion-dollar deal in June with Kingfisher Airlines for five A380 super jumbos, five A330s and an equal number of planned A350 wide-bodied jets.
-Sept 29,  2005

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