Several years after the Vijay Kelkar Committee recommendation, Government has allocated Rs 325 crore (Rs 3.25 billion) as budgetary support to Indian Airlines linked to its purchase of 43 aircraft, for which negotiations are in the final stages now.
The approved 2005-06 plan outlay for the IA has been fixed at Rs 911.73 crore (Rs 9.117 billion), of which Rs 325 crore would go for purchase of these aircraft as part of its fleet acquisition programme, an official spokesperson said today.
The approved allocation for Air-India for the same period was Rs 468.74 crore (Rs 4.687 billion), of which a token provision of Rs 10 crore (Rs 100 million) has been made to finance the fleet induction of the airline.
Air-India is yet to take a final decision on the matter.
Of Rs 911.73 crore for the IA, Rs 112.44 crore (Rs 1.124 billion) has been allocated towards repayment of loans to banks and financial institutions for the acquisition of A-320 aircraft earlier. A provision of Rs 762.73 crore (Rs 7.627 billion), including Rs 325 crore, has been made available for the latest fleet acquisition plan.
Another provision of Rs 36.56 crore (Rs 365.6 million) has been made towards support facilities of the IA, including construction of workshop and engineering facilities, computer and communication systems and renovation of booking offices.
The fleet plan of IA has been cleared by the Public Investment Board and the fresh proposal, after being finalised by the company's negotiating committee, is expected to be sent to the Cabinet Committee on Economic Affairs.
Of Air-India's approved plan outlay of Rs 468.74 crore, one crore has been provided as budgetary support while the remaining amount would be met out of internal and extra budgetary resources of the company, the spokesperson said.
While a provision of Rs 308.74 crore (Rs 3.087 billion) has been made for repayments of loans for acquisition of six Boeing 747-400 aircraft and a Airbus 310-300 simulator, a token provision of Rs 10 crore has been made for the new aircraft to be inducted by A-I.
Another Rs 150 crore has been made for non-aircraft projects like ground handling equipment, engineering and workshop equipment, security equipment, computers and office equipment, she added.
© 2025