Mallya orders 50 Airbus jets for $7.3 bn
Kingfisher prepares to add overseas routes once norms to fly abroad are relaxed, report Ranju Sarkar and Lalatendu Mishra.india Updated: Jun 21, 2007 03:55 IST
Vijay Mallya, who wants his Kingfisher Airlines to fly abroad, on Wednesday placed an order with Airbus for 50 planes, including the new A350 extra wide body jets, in a contract valued at $7.3 billion at list prices.
The Mumbai-based airline owned by the UB Group plans to buy 15 A350-800s, 10 A330-200s, five long-range A340-500s and 20 A320s, Airbus said on Wednesday in a press statement at the Paris Air Show.
Kingfisher has increased orders for wide-bodied jets as it prepares to add overseas routes once norms to fly abroad are relaxed. Current rules allow only airlines that have been flying for five years and have 20 planes to fly abroad.
‘‘Our strategy is to open new long-haul routes and expand existing ones. With the A340-500 and then the A350 extra wide bodied jets, we will be able to offer direct routes between India and the US,’’ said Vijay Mallya in the statement.
Alongside the jet order Kingfisher Airlines has bought two versions of the Rolls-Royce Trent to power the 25 new Airbus wide body aircraft. The value of the engines at list prices is $1 billion.
The initial reaction from the Indian airline industry was that of shock and awe. “From where will he get the money to fund the acquisition of aircraft and where will he deploy them?” was the initial reaction from aviation experts.
With this deal, Kingfisher and Air Deccan, in which Mallya acquired a 26 per cent stake, have placed orders for 176 Airbus aircraft. It could not be confirmed if Kingfisher had paid a token fee for the order.
Kingfisher had already ordered five of the original version of the A350 and has upgraded these orders to the planemaker's redesigned A350 XWB model. The new order for 15 A350 XWBs brings the total commitment for the aircraft to 20.
Airbus redesigned the A350 last year to boost flagging sales, dubbing its new version the Xtra Wide Body or XWB.
First Published: Jun 20, 2007 20:01 IST