Airbus wins $1.9 bn Kingfisher deal

Nov 21 | Updated: Nov 22 2005, 05:30am hrs
Airbus SAS, the worlds biggest maker of commercial aircraft, won an order for 30 planes worth $1.9 billion from Kingfisher Airlines Ltd, an Indian carrier thats buying planes to tap rising demand for air travel.

Kingfisher, a Mumbai-based airline owned by UB Group, ordered A320 planes valued at $65 million each, UB Group chairman Vijay Mallya said on Monday at the Dubai Air Show. The orders will be partly funded by the earnings of UBs brewery business, which produces half the beer sold in India.

Kingfisher has enjoyed accelerated growth since its launch in May 2005, Mr Mallya told reporters. This new order marks the next stage of the airlines development.

Indian carriers have ordered more than 200 planes this year as the fastest economic growth in more than a year stokes demand for air travel in a nation of 1.1 billion people. India expects passenger traffic to rise an average 25% annually until 2010 as new airlines start operations with ticket prices that are as low as train fares.

India-based airlines may buy up to 570 new aircraft valued at $35 billion by 2023, according to estimates by the worlds two largest aircraft makers. The countrys airlines have ordered $24 billion of new planes so far this year, excluding Kingfishers order on Monday.

As many as five new carriers have emerged in India in the past two years and the government estimates at least eight others are planning to start operations.

Kingfisher, a six-month-old airline named after the UB groups best-selling beer brand, ordered 10 A320s and three A319s to date and took delivery of three of the A320s. It had an option to buy 20 more single-aisle A320 planes according to an agreement signed with the Toulouse, France-based aircraft maker. The carrier said in June it will buy 15 planes including five of the new 555-seat A380s. It has signed for the double-decker A380s, and not for 10 other planes including five A330-200s.

Bloomberg