Air India to buy 50 Boeing planes

Air India plans to float its shares on the stockmarket

Air India's board on Tuesday agreed to buy Boeing aeroplanes worth up to 300bn rupees (£3.62bn; $6.9bn), in what could be India's biggest aviation deal yet.

Air India has been in talks with both Boeing and Airbus for the past year about the purchase of some 50 planes.

It was initially thought it might buy a mix of planes from both makers, but it opted to buy Boeing planes.

State-owned Air India also confirmed plans to float its shares on the stockmarket.

The government said in January it may sell 10% of the firm.

Rival merits

The Indian government had suggested that Air India might buy a mix of Boeing and Airbus planes.

Our 777-LR aircraft are capable of direct flights from India to America and this would save Air India a lot of money in terms of fuel Dinesh Keskar, president of trade for Boeing

Air India has selected the Boeing 777-200LR, 777-300ER and its new 787 Dreamliner.

Representing Airbus on the shortlist were the Airbus 340-500, 340-600 and 330-200.

Air India's existing fleet consists of 18 Boeing aircraft and 19 Airbus planes.

It also gained agreement from Boeing to include nine seats across in economy instead of the usual eight, reducing the 250-seat Airbus 330-200's chances of selection, according to the Economic Times of India.

No delivery date for the aircraft has been given so far, though some reports suggest they will be phased in over 10 years, starting in 2006.

Big deal

The deal is "the largest order bagged by Boeing in the country," according to Dinesh Keskar, president of trade for Boeing.

"If you look at the evaluation that has been made by the officials, our 777-LR aircraft are capable of direct flights from India to America and this would save Air India a lot of money in terms of fuel," Mr Keskar told the BBC.

"Each of our aeroplanes has more capability of servicing high-density routes such as London and this will be beneficial to Air India."

India's other state-owned carrier, Indian Airlines, plans to buy about 42 planes from Airbus at a cost of more than £2bn, according to newswire reports.

Airline travel is booming in India, rising 26.5% in the six months to March.