The minister told The Financial Express last week that the expert committee will give its proposal on May 15, which will include the number and the type of aircraft required for the airline. The airline will then negotiate the price with aircraft manufacturers and make the final choice by the June 15.To industry experts, this appears to be a tall order. "Fleet expansion of AI was planned over four year ago but the ministry and the board have yet to decide the number of aircraft it required," they said. The initial plan to acquire 26 MCLR aircraft has been changed twice since then, they add.Moreover, even if the airline decides to expand the fleet today, it takes more than a month to finallyplace orders and until this happens nothing should be considered final, they said.

As per the procedure, the airline has to first announce the request for proposals. The aircraft manufacturers will take a couple of weeks to submit their bids which will be examined by the airline. This also includes negotiations with the bidders on the issue of technical requirement, delivery schedule and the price of the aircraft.

After this the airline has to call for the final offers from the bidders. The decision at this juncture needs to be taken in consultation with the ministry, they said. The experts however said replacement of Indian Airlines' aircraft may take place within the timeframe mentioned by the minister as the company has been diligently pursuing its plans. Moreover, it needs urgent replacement of the its old aircraft, they add. Commenting on the financial resources available to the two airlines, the experts say that funding of the expansion plans may not be difficult for the national carriers.

Up to85 per cent of the funds are provided by the funding institution and the buyers have to arrange only 15 per cent. Besides, while booking the order the airline has to only pay a token amount as security which would not be difficult for national carriers. Specially in case of IA, the government has already committed to give over Rs 400 crore for purchase of aircraft. According to Kumar, the airline was even given Rs 125 crore last year for the same purpose, however, it was not utilised.

Indian Airlines has a fleet of 56 aircraft of which 11 Airbus A-320 and 12 Boeing-737 need to be replaced urgently as these are over 18 and 17 year old respectively. The airline which was making losses for almost a decade improved performance for the past two years. During 1997-98, it made a net profit of over Rs 47 crore but in 1998-99 this came down to Rs 10 crore.