KEY POINTS:
Air India, which is already buying new planes to spruce up its fleet, plans to order another 60 aircraft to meet rising demand.
Air India, which ordered 68 aircraft from Boeing last year, will prepare a proposal for the new purchases in two weeks, aviation minister Praful Patel said on the weekend.
The nation's biggest overseas carrier will evaluate aircraft from both Boeing and European rival Airbus, he said.
State-run Air India, set to be merged with Indian Airlines, may need more planes as economic growth and rising incomes prompt more Indians to fly.
The carrier will have to face competition from Jet Airways (India) and Lufthansa that are expanding in India.
"Looking at the demand and passenger growth, the number of new orders could be about 60," Air India's chairman V. Thulasidas said at an event in New Delhi to showcase the new planes bought by the two carriers. "In the next two to three years, we should be replacing all the old aircraft."
Mumbai-based Air India will also consider buying the Airbus A380, Patel said.
Delivery from Boeing for the estimated US$10 billion order placed last year began in December.
"We will revisit the aircraft acquisition process of Air India within a fortnight," Patel said. "After all these new aircraft are inducted and the old ones phased out, Air India will need more aircraft."
Air India may sell shares next year to partly fund the purchase of the new planes, Patel said in May. Air India and Indian Airlines were planning to go for separate initial public offerings earlier, but the plan was delayed until the merger.
Purchase of the new planes may help Air India improve its profits, which declined to 149.4 million rupees ($4.8 million) in the year ended March 31, 2006, from 963.6 million a year earlier.
Air India and Indian Airlines have more than 110 planes in all and have ordered an additional 111 from Boeing and Airbus.
Air India ordered 50 Boeing planes for itself and 18 for its low-fare unit Air India Express in January 2006 to start flights to the US and Canada.
Indian Airlines, the nation's third-biggest domestic carrier, ordered 43 planes from Airbus to introduce more services and win market share from legacy and budget carriers in the country.
Air India will begin flights with two new Boeing 777-200 LR planes from August 1.
The airline will have daily flights to New York from Mumbai, which will be followed by flights from New Delhi, starting early 2008.
- BLOOMBERG
