18th November 2005 at 06:42http://www.bloomberg.com/apps/news?pid=10000085&sid=a7qYWt28rkZM&refer=europe
Airbus to Get $2 Bln Order From India's Kingfisher at Dubai
Nov. 18 (Bloomberg) -- Airbus SAS, the world's biggest planemaker, will win an order for 30 planes worth $2 billion from Kingfisher Airlines at the Dubai Air Show where the European company will battle with Boeing Co. for new business.
Mumbai-based Kingfisher, owned by United Breweries, will announce the order at the show, which opens Nov. 20, Kingfisher Chief Executive Nigel Harwood said yesterday in a phone interview. The planes are from the single-aisle A320 series with a list price of about $65 million each.
Airbus, based in Toulouse, France, and Chicago-based Boeing Co. will be vying for new customers at the show as the U.S. company tries to win more orders than its European competitor for the first time in five years. Boeing has booked 659 orders so far this year compared with 494 for Airbus.
``Getting an order from Kingfisher is a good thing for Airbus because they need to catch up to Boeing in the Indian market, and there's a lot of cash at Kingfisher,'' said Richard Aboulafia, vice president at the Teal Group in Fairfax, Virginia. Boeing this year won a commitment for 68 planes from Air India and a 10-plane order from Jet Airways (India) Ltd., he said.
Boeing put further pressure on Airbus Nov. 15 when the U.S. company said it would offer a bigger and more efficient version of its almost four-decade-old 747 jumbo jet, challenging Airbus A380 in the market for planes seating more than 400 passengers. Japan's Nippon Cargo Airlines Co. ordered eight and Luxembourg's Cargolux Airlines International SA committed to 10 planes.
Kingfisher has ordered 10 A320s and three A319s to date, and taken delivery of three of the A320s. Airbus spokeswoman Barbara Kracht declined to comment.
Airbus and Boeing want to sell more aircraft to India, where economic growth is driving demand for travel. The government is also opening up its aviation industry, encouraging more private airlines to enter the market.
India-based airlines may buy as many as 570 new aircraft by 2023, according to an estimate by Airbus earlier this year. Asia- Pacific airlines, including those in India, will account for 36 percent of the $2.1 trillion dollars that will be spent on new aircraft over the next 20 years, Boeing said on June 8.
Kingfisher said in June it would buy 15 planes including five of the new 555-seat A380s. It has signed for the A380s but not for 10 other planes including five A330-200s.
Kingfisher Airlines is aiming for an initial share sale in 2006 to finance its aircraft purchases, the carrier said in July. The initial deposit and funding for aircraft already on order were funded by United Breweries, though Kingfisher needs to look at capital markets for funding the larger purchases, Vijay Mallya, chairman of the UB Group, parent of United Breweries, said in a July interview.
Kingfisher Airlines is one of four new carriers that started flying in India in the past two years. Mallya, founded Kingfisher Airlines with 1.9 billion rupees ($43.6 million) from his United Breweries Holdings Ltd., India's biggest producer of alcoholic beverages.
The carrier, which started flying in May, also will order 20 turbo-propeller-driven aircraft at the show, Harwood said. He declined to specify the maker. Avions de Transport Regional, half owned by Airbus parent European Aeronautic, Defence & Space Co. and half by Italy's Finmecanica Spa, makes turbo-prop planes, as does Montreal-based Bombardier Inc. .
Shares of EADS, Airbus's 80 percent owner, have gained 40 percent this year compared with a 31 percent gain for Boeing shares.
ps. in a separate deal , K is also buying 20 ATR turboprop for $300 mil. both deals will be announced over the weekend in dubai airshow.