THE LOW PRICE OF FIVE 20-year old Boeing 737-200s being offered for sale by Government-owned Indian Airlines has elicited bids from two independent rivals - NEPC Airlines and Sahara India Airlines. The five aircraft are expected to fetch up to $40 million.

NEPC and Sahara have ambitions to challenge independent rivals East West, Jet Airways and ModiLuft for dominance in a growing domestic market.

Sahara, which has temporarily lost its airline status because of the crash of one of its Boeing 737s at Delhi, is particularly keen to secure the purchase, which would bring its Boeing fleet to eight. NEPC Airlines, which acquired loss-making Damania earlier this year, wants to further strengthen, its presence in the market and open new routes.

Among its rivals, Jet Airways is seeking to acquire more 737-400s, but has ruled out an equity tie up with Malaysia Airlines, or any intent to raise cash from the capital markets, while ModiLuft is hoping for a positive response from Lufthansa, to extend its technical and management assistance to an equity partnership, which would advance its planned expansion programme. Lufthansa's regional director Michael Stier says, however, that taking a stake in ModiLuft is not on the agenda at present.

Waiting, are Tata Industries and Singapore Airlines, whose failed attempt at setting up a joint airline in India appears not to have been terminal. The Government has said that it would reconsider the application once essential airport infrastructure developments are complete in 1996.

Indian Airlines, meanwhile, is planning to transfer its remaining Boeing 737-200s into a wholly owned short-haul subsidiary, IA Allied Services, to take advantage of lower costs and avoid recurring disputes with its pilots. It hopes to recruit pilots under new terms for Allied Services, with existing crew used exclusively on Airbuses.

Source: Flight International