Indian budget carrier to buy 30 Airbus A320

21st December 2004, Comments 0 comments

BANGALORE, India, Dec 21 (AFP) - European consortium Airbus Industrie Tuesday won its second deal in a week from India's growing budget airline business, selling 30 Airbus A320 aircraft to Air Deccan.

BANGALORE, India, Dec 21 (AFP) - European consortium Airbus Industrie Tuesday won its second deal in a week from India's growing budget airline business, selling 30 Airbus A320 aircraft to Air Deccan.

John Leahy, chief commercial officer of Airbus, said the USD 1.8 billion (EUR 1.3 billion) deal was a firm order for 30 aircraft starting in 2005 with an additional option for another 20 aircraft.

Air Deccan started up budget services a year ago and now faces a rival low-cost carrier, Kingfisher Airlines, owned by liquor baron and member of parliament Vijay Mallya.

Mallya said Saturday his new carrier signed a deal worth up to USD 1.8 billion EUR 1.3 billion) to buy as many as 30 Airbus aircraft - 10 on a firm basis with options to acquire the rest.

Malaysian budget carrier AirAsia on Friday signed a deal to buy 40 A320 jets valued at USD 2.5 billion (EUR 1.8 billion).

"Around 14 to 15 million people fly each year in India and Malaysia, but the population of India is one billion while the population of Malaysia is 34 million," Leahy said. "There is a lot of room for growth."

Airbus also nearly doubled its earlier projections that only 220 aircraft would be sold in the Indian market by 2019.

"We have revised our earlier projections. About 400 aircraft by 2019, that could be the number," Leahy told reporters.

He said the growth was being driven by the entry of budget airlines such as Air Deccan and King Fisher and fleet expansion by state carriers Air India and Indian Airlines.

Leahy said Airbus had received more than 200 firm orders from budget carriers worldwide in 2004, a year in which the company's total aircraft sales would reach 325. The company is also looking for more business in India.

"We now have Deccan and Kingfisher and I am hopeful Indian Airlines will decide soon on its 43 aircraft," he said.

Earlier this month a government committee cleared Indian Airlines' request to buy 43 Airbus aircraft. Its sister airline, international flag-carrier Air-India, has invited bids for around 50 new planes.

Leahy said Airbus was also in talks with Air India over selling its A330 and A340 aircraft.

Air Deccan competes with Jet Airways, Sahara Airlines and Indian Airlines which command the largest share of India's booming domestic aviation market.

Air Deccan plans to raise USD 50 million (EUR 37 million) in private equity by shedding a 26 percent stake to finance the fleet expansion.

British billionaire Richard Branson's Virgin group has held talks with Air Deccan over picking up a stake, industry officials said.

However, whether the Virgin group would be able to acquire a stake remains uncertain as present Indian laws do not allow foreign carriers to own equity in domestic airlines.

India's aviation sector is poised to take off as increasing affluence prompts more to travel by plane than train.

The number of air travellers in the South Asian country rose 26.5 percent in the first half of the year to March, with 18.52 million people boarding flights and is expected to surge to 50 million annually in five years as a booming economy and a series of new low-cost carriers spur demand, analysts forecast.

Air Deccan now operates three Airbus 320 planes and seven ATR 48-seater aircraft. Three more ATRs are scheduled to join the fleet by next month.

In August, Air Deccan launched USD 10 (EUR 7.5) tickets between New Delhi and Bangalore. With Air Deccan, about 10 early-bird bookers can pay INR 500 rupees (EUR 8.5) while over 50 seats are available for INR 5,000 (EUR 85.50). A one-way ticket on a mainstream carrier would be INR 10,400 (EUR 177.60).

It operates 78 flights all over India daily and plans to touch 100 by the end of the year.


Subject: French News

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