Chirac lands, Airbus deal takes off

Airbus today signed $2.5 bn deal with domestic carrier Indian for purchase of 43 planes, writes Deshbandhu Singh.

india Updated: Feb 20, 2006 17:32 IST

The French aircraft manufacturer Airbus and domestic carrier Indian today signed an agreement for purchase of 43 aircraft by the latter worth $2.5 billion.

The deal, which has been under negotiation since 2003, was signed after talks between Prime Minister Manmohan Singh and visiting French President Jacques Chirac.

The agreement was signed by Kiran Rao, Airbus vice president (marketing and contracts), and Indian Airlines chairman V Trivedi.

The agreementhas marked the first purchase of new planes by the Indian in 15 years.

Under the agreement, the delivery of the aircraft will begin late October or early November this year and is to be completed over a period of 43 months thereafter, Airbus Industrie (India) President for Customer Affairs Kiran Rao said.

Among the planes to be delivered are 19 A-319, four A-320 and 20 A-321.

This deal has come after the controversycreated byAir India's decision to buy 68 aircraft from its US competitor Boeing.

Disappointed after Airbus Industrie lost Air-India's deal for 50 long-range aircraft to Boeing, France-based aircraft manufacturer got a major boost by huge orders for its flagship aircraft A320 by the Indian private carriers.

Private carriers had led the aircraft buying spree with Air Deccan ordering 32 A-320s, Jet Airways ten A-330s with a buying option for another ten, Kingfisher 15 aircraft including five double-decker A-380s and start-up airline InterGlobe placing orders for 100 A-320s, said Kiran Rao, Senior Vice President (Sales) of the European aircraft.

European aircraft maker Airbus also increased its projections for the Indian market by over 40 per cent to 570 planes worth $55 billion by 2023 from its last estimate of 400, as against Boeing's 20 year prediction of 492 commercial airplane orders valued at $36 billion.

World wide, while Airbus claimed it had booked more orders than its rival in 2005 for the fifth straight year -- 1,055 Airbus orders compared with Boeing's 1,002 - it is estimated Boeing had 55 per cent of the market as measured by dollar value.

According to an Airbus official, in the Paris Air Show last year the company had bagged orders for supply of 320 aircraft worth $33.5 billion compared with 146 Boeing planes worth $15.3 billion.

Airbus is now eyeing India, along with China, as the most important markets for the world's largest commercial aircraft, the A380.

For Airbus, 45 per cent global orders came from the Asia-Pacific region with China and India contributing very significantly.

Seven of the 16 current customers for the A380 are in the region -- India's Kingfisher (5), China's Southern Airlines, Korean Airlines, Malaysia Airlines, Qantas, Singapore Airlines and Thai Airways which together account for some 49 of the 159 aircraft now on order.

Airbus plans to deliver the first A380 to Singapore Airlines by the end of 2006, and to Qantas and Emirates next year.

According to Anthony Phillips, Singapore-based Airbus regional communications representative, "The expectation is two new customers every year (for the A380) ... It would not be unreasonable to say that at least one new customer could come from the Asia-Pacific region, in particular from high growth markets like China or India."

Philips said fuel efficiency savings of up to 20 per cent made the A380 an alternative to Boeing's flagship 747 jet.

First Published: Feb 20, 2006 14:29 IST