As per a recent proposal, the Rs 10,000 crore (Rs 100 billion) fleet acquisition plan of Indian Airlines will be part-funded by the government, while the rest would be raised as loans from international financial institutions.

As per the proposal put up before the government, Indian Airlines wants a government contribution of about 10 to 15 per cent of its total fleet acquisition budget.

On the external funding part, the airline will appoint a consortium of bankers to raise funds from various sources as debt. Airline industry sources said that this would be the largest debt raised by the Indian Airlines.

In the wake of the recent hike in airline fares owing to rise in ATF prices, Civil Aviation Minister Praful Patel on Thursday met Union Finance Minister P Chidambaram and sought reduction in excise duty on the fuel in the Budget.

"Several airlines including private and public carriers have been complaining about the continued spurt in ATF prices. It is an area of concern. It should be reduced so that airline fares comes down," Patel said after meeting Chidambaram.

He said that the finance minister has agreed to consider a reduction in excise duties on ATF in the Budget. Patel said his ministry was trying its best to bring down the prices of ATF, besides regularising the sales tax levied by various states.

"We want to bring down the prices as it has a direct impact on the consumers," Patel said, referring to the recent 10 per cent hike in fares by all airlines," he said.

He declined to comment on whether the government would provide in the forthcoming Budget the Rs 325 crore (Rs 3.25 billion) required for fleet acquisition.

On the constitution of the empowered group of ministers for aviation, Patel said that it would be constituted soon and the group would look into various issues of civil aviation.

Asked whether the GOM would also look into the fleet acquisition for Indian Airlines and Air-India, Patel said it would look into every aspect of the aviation ministry.

"The GOM will be constituted soon and will look into various matters pertaining to the civil aviation ministry," Patel said.

Patel said there was a GOM in the previous NDA government and the Congress-led UPA government would constitute a new one soon to discuss the various issues pertaining to the ministry.