Two aircraft manufacturers -- the Franco Italian ATR and Canada's Bombardier Aerospace -- are in the race for the contract. While ATR has offered the ATR 42-500 aircraft, Bombardier has pitched its Dash-8 aircraft for the deal.

An internal IA committee, headed by finance director NC Ghosh, has completed the evaluation of the commercial bids submitted by the two companies.

"The report will be presented to the board of directors and we hope to arrive at a decision" said PC Sen, chairman and managing director, Indian Airlines. IA had earlier made it clear that the contract will be decided on the `lowest bid' basis as the aircraft offered by the two companies were found to be technically in the same category.

The two aircraft companies submitted their finalbids in March this year. The final offers include such details like price, manufacturer's credit, financing arrangement, support packages for repairs and co-production offers.

IA will finance the purchase of these aircraft from internal resources. The domestic carrier will buy six planes initially. However, it plans to purchase a total of 18 such 50-seater aircraft.

The planes will be used to augment the fleet of Alliance Air, IA's fully-owned subsidiary. They will operate on short-haul routes, especially in the North East. The induction of 50-seater aircraft will help IA cut costs as it is currently operating bigger planes which have proved to be inefficient on these routes.

IA's plan to induct the small sized 50-seater planes in its fleet ran into a number of airpockets. The contract was vetted by several committees and sub-committes, besides facing trouble from the contending parties. First the Dutch company, Fokker, and later, Sweden's Saab, abandoned the race.

The move to purchase 50-seateraircraft has received full support from civil aviation minister Ananth Kumar. The minister is in favour of buying these aircraft to facilitate air operations from smaller airports in the country. This will expand the reach of civil aviation services in India, he has said.

IA achieved a financial turn-around in 1997-98, posting a profit of Rs 40 crore. The airline expects to achieve a profit of Rs 95 crore in the current fiscal. The induction of new aircraft in its fleet is one of the key factors which is expected to contribute to higher profitability of the airline.