Indian liquor baron orders 30 Airbus

19th December 2004, Comments 0 comments

BOMBAY, Dec 18 (AFP) - Indian liquor baron Vijay Mallya said Saturday his new Kingfisher Airlines has signed a deal worth up to USD 1.8 billion (EUR 1.3 billion) to buy 30 Airbus aircraft - 10 on a firm basis with options to acquire the rest.

BOMBAY, Dec 18 (AFP) - Indian liquor baron Vijay Mallya said Saturday his new Kingfisher Airlines has signed a deal worth up to USD 1.8 billion (EUR 1.3 billion) to buy 30 Airbus aircraft - 10 on a firm basis with options to acquire the rest.

"Kingfisher expects to take delivery of these A320s at a rate of up to nine aircraft per year until 2008 with the first delivery expected in April 2005," Mallya told a Bombay news conference.

Kingfisher Airlines, one of a number of new budget domestic carriers in India, is named after Mallya's UB Group's famous beer brand Kingfisher.

Mallya said his airline would start domestic services by April with a fleet of eight aircraft on which fashion models will serve as flight attendants.

Bangalore-based UB Group has said it would cut fares below those of established carriers by tight cost control, issuing e-tickets, online reservations and outsourcing services.

Mallya has said the airline would initially operate domestic services but could fly overseas if the government changes a policy allowing only state carriers on most international routes.

Aviation Minister Praful Patel has already said curbs on international flights should be lifted soon to boost air services.

Airbus chief commercial officer John J. Leahy told reporters the France-based aircraft maker aims to dispatch the first aircraft by April 2005.

Leahy said the price offered was the "catalogue price." The A320 seats between 300 and 350 passengers depending on the seating configuration.

The deal is the first major one won by Airbus from an Indian company in more than a decade. A plan by state-run Indian Airlines to buy 43 Airbus aircraft is awaiting final cabinet clearance.

"A lot of bureaucracy was present earlier, but now things are changing and other Indian airlines are putting orders," Leahy said, referring to greater liberalisation of India's airline sector.

Mallya said he hoped the airline would break even in the first year.

"My mandate to the management team is that our airline should be the lowest cost airline and yet offer a unique experience of flying with largest comparable seat (size) in the Indian skies," he said.

"We can't do much about external factors that influence costs" such as high international aviation fuel prices, "but other costs have to be the lowest."

India's aviation sector is poised to take off as increasing affluence in the country of more than one billion people prompts more to travel by plane than train, analysts say.

The number of air travellers in India leapt by 26.5 percent in the first half of the financial year to March with 18.52 million people boarding flights.

The number of air passengers 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.

Mallya said his second entry into the aviation business after a failed airline venture in 1990 was driven by "the robust economic growth in India."

"We decided to do it right and put our money where our mouth is and get in the commercial airlines market as the aviation sector goes hand-in-hand with economic growth," he said.

India's economy is expected to expand by 6.5 to 7.0 percent in the financial year to March 2005, making it one of the world's fastest growing.

Jet Airways, Sahara and Indian Airlines command the largest share of the booming domestic aviation market, but year-old upstart budget carrier Air Deccan, headquartered in Bangalore, has been snipping away at their share.

© AFP

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