Indian airlines continue extraordinary growth

According to a Reuters report, Airbus has concluded an agreement with state-run Indian Airlines for the purchase of 43 Airbus aircraft.

The deal, estimated at USD$2.5 billion, had already been approved by the Indian cabinet, but was finalized as French President Jacques Chirac visits India, Asia’s third-largest economy, in a bid to boost trade ties.

The purchase of the 43 aircraft will help Indian Airlines replace its ageing fleet at a time when the civil aviation sector is booming thanks to falling ticket prices, the arrival of discount airlines and rising disposable incomes.

Over the past few years, Indian Airlines has lost market share to nimble private players such as Jet Airways which has a relatively modern fleet and better standards of service.

Indian Airlines plans to buy 19 A319s, four A320s and 20 A321s as a part of a five-year fleet renewal program.

“We will deliver the first aircraft in October or November, and then one aircraft per month,” Kiran Rao, president of Airbus’ Indian operations, told reporters.

Meanwhile, another new player in the Indian skies, Kingfisher Airlines on Sunday signed a deal with France-based planemaker ATR to buy 15 of their 72-500 planes, in a deal worth USD$270 million.

Officials from the two companies signed the deal in the presence of French President Jacques Chirac, who is on a visit to India.

Kingfisher Airlines is the brainchild of drinks tycoon Vijay Mallya, whose UB Group makes Kingfisher beer, India’s top-selling brand, and a host of lifestyle goods.

Kingfisher Airlines, a recently launched low-cost carrier, had placed an order for 20 ATR planes in November.

The 15 ATRs for which the order was sealed on Sunday are to be delivered between March 2006 and August 2008.

Kingfisher Airlines took an option to buy 20 more aircraft.