The Toulouse-based Airbus is one of the contenders which have bid for a tender floated by Air India for dry-lease of two A-310s.

Ten other companies, most of them aircraft-leasing firms, are also in the race for the contract. The tender was closed last week.

Airbus bid for two A-310 aircraft in 1992. The aircraft were returned to Airbus by the customer airline.

Commenting on the bid, Airbus president Kiran Rao said the sale of second-hand aircraft was not unusual. "We have an asset-management team whose main task is to take care of second-hand aircraft sale."

So far, the European consortium, along with rival Boeing, has been keenly pursuing Air India and Indian Airlines to sale new aircraft. Airbus and Boeing fought closely for Air India's $3-billion medium-capacity-long-range aircraft contract more than two years ago.

However, the two aircraftmanufacturers have realised that Air India and Indian Airlines would not be able to buy new aircraft immediately.

The two state-run carriers are awaiting bailout packages from the government. Experts say the carriers can only buy aircraft after the government takes a decision on this score.

Indian Airlines and Air India are, in the meanwhile, opting for dry-lease of aircraft. Air Inida has already sold off two of its 747-200s. The two Airbus A-310s (200-seater aircraft) that are to be dry-leased will replace them.

Air India is also planning to sell off two more 747s this year. It has already floated a tender to sell them. The national flag-carrier will then be left with five of the original nine 747s in its fleet.

Dry-lease (hiring aircraft without crew) is considered a cheaper option, compared with purchasing aircraft for smaller carriers. Air India and Indian Airlines have declared their intention of selling older aircraft and dry-leasing relatively newer ones. Indian Airlines has an old fleet ofBoeing 727s, owned by Allaince Air, which it has to retire.

Indian Airlines is expected to post a net profit of Rs 40-50 crore in 1998-99. Air India, on the other hand, has announced that its net losses are expected to mount from the current Rs 1,077 crore in the first five months of 1998-99.