Airbus Gets USD$7.2 Bln GoAir Order
Airbus has received an order worth USD$7.2 billion for 72 planes from Indian carrier GoAir, the latest in a series of Indian airlines scrambling to meet growing demand in Asia's third-largest economy.
The order for A320 planes brings GoAir's total order book with Airbus to USD$9.6 billion, managing director Jeh Wadia told reporters on Thursday.
Indian carriers are growing their fleets as demand booms in India, where an economy growing at nearly 9 percent is spurring business travel and a burgeoning middle class long accustomed to rail travel is now increasingly opting for air.
India's largest private carrier Jet Airways is also expected to place aircraft orders with Airbus at the Paris Air Show later this month, according to media reports.
Earlier this year, budget carrier IndiGo placed a USD$15.6 billion order with Airbus for 180 planes in what it called the biggest jet order in commercial aviation history.
And in November, rival SpiceJet agreed to buy 30 Nextgen turboprop aircraft from Canada's Bombardier for USD$915 million.
"In terms of aircraft, we see tremendous potential in India, which has barely six airlines with 350 aircrafts catering to a billion people, compared with China's present 1,100 aircrafts," Wadia said.
India is scrambling to get its airport infrastructure in line with ballooning demand. The country has revamped its ailing airports in three major cities - New Delhi, Bangalore and Hyderabad, but smaller cities still need to be addressed.
GoAir has ordered the "A320neo" planes -- an upgraded version of Airbus's best-selling A320 180-seat workhorse. The deliveries will begin in 2015.
"We are evaluating various fund-raising options (for the deal). It will be a combination of debt and equity," Wadia said.
GoAir flies to 18 destinations across India, with a focus on the busy metro routes of Mumbai, New Delhi and Bangalore. It now plans to focus on smaller cities, Wadia said.
Last month, two sources with direct knowledge of the matter had told reporters GoAir was planning to raise about USD$150 million through a public offer to fund its operational expenses, repay debt and buy new planes.