Air Deccan to buy 30 more Airbus

New Delhi: Indian low-cost airline Air Deccan said it will buy 30 new A320 aircraft worth a list price of $1.5 billion from Airbus, adding to a similar order placed a year ago ahead of a plan to go public.

Deccan is expected to float an IPO in the first quarter of 2006.

"The acquisition deal was signed with Airbus Industries earlier this week and the delivery will begin from 2008," the Bangalore-based airline said in a statement.

Deccan Aviation, the airline's owner, had placed orders for 32 Airbus A320 planes with a list price of $1.8 billion a year ago and also for 30 ATR 72-500 aircraft.

"We get a better bargaining power with these new 30 aircraft," an Air Deccan spokeswoman said. She declined to give the exact prices for the aircraft.

Air Deccan has seven Airbus aircraft and 17 ATRs in its fleet. ATR, or Avions de Transport Regional, is owned by Airbus's parent, European Aeronautic Defence and Space Co NV, and Italy's Finmeccania Group.

The spokeswoman said the new ATRs were expected to start arriving in 2006 and the Airbus planes ordered a year ago in 2007, but next year will also see an induction of leased Airbus aircraft outside the planned purchases.

"The additional acquisition of fleet will aid our plans of becoming a global player," Air Deccan's Managing Director G R Gopinath said in the statement, which said new centres could be connected by the airline with a growing fleet.

Deccan is expected to float an initial public offer, IPO, of shares to raise up to $250 million in the first quarter of 2006.

Company officials offered no comment on the timing of the share issue.

India's domestic air travel is forecast to grow 20 per cent a year over the next five years as budget carriers draw in train passengers in a country where less than 1 per cent of the billion-plus people travel by air.

When Deccan lists, it would be the third carrier to trade on Indian stock exchanges after Jet Airways and SpiceJet.

Deccan's other domestic carriers include state-owned Indian Airlines and privately controlled Kingfisher Airlines, an affiliate of India's top brewer United Breweries, and Air Sahara.