Tuesday, January 25 2005 15:17 Hrs (IST) - World Time -

Singapore: Air India is negotiating with banks to help finance the acquisition of 50 new long-range aircraft with deliveries to start next year, Civil Aviation Secretary Ajay Prasad said in Singapore today (Jan 25, 2005).

"We have started negotiations with banks for external financing," Prasad told reporters on the sidelines of a regional aviation conference, adding he did not see any difficulties in obtaining the funds.

He said the new orders would comprise ultra-long range aircraft, medium capacity long-range 350-seater planes and medium capacity long-range 250-seaters. The initial deliveries of the aircraft are expected in 2006, Prasad said.

While declining to give a value to the orders, he said it will be a "very substantial package."

"Technical and financial bids have been received in December 2004. Air India is likely to come up with firm proposals shortly after due technical and economic evaluation," Prasad said.

He gave no indication as to who the preferred supplier was between US giant Boeing and its European rival, Airbus, who have been fighting it out to establish global dominance in the aircraft market.

Apart from the long-range planes, Air India has also "firmed up a plan" to acquire 18 short-range aircraft at an estimated cost of $ one billion for its proposed low-cost carrier called Air India Express, Prasad said.

The budget carrier is expected to make its first flight on March 27. Prasad was speaking to reporters after giving a keynote address on the final day of the two-day Asia Pacific and Middle East Aviation and Tourism Outlook Conference here organised by the Centre for Asia Pacific Aviation.