Boeing, Airbus vying for US$2b order from India’s Air One

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NEW DELHI: India’s Air One Aviation Pte is seeking US$2 billion (RM6.3 billion) of jets to take on Singapore Airlines Ltd’s venture in the South Asian nation, stoking competition in a market where carriers lost almost US$10 billion in seven years.

Air One, among six companies that last month got initial approval to start airlines in India, is looking at Airbus Group NV’s A320s and Boeing Co’s 737s, its director Alok Sharma said in an interview on Wednesday. At list prices, 20 Boeing 737-900 ERs cost US$1.98 billion, though airlines typically get discounts.

“You can’t start with one plane and wait for another six months to get the next one,” Sharma said in his office near New Delhi’s airport, adding that Air One plans to provide full-service flights from mid-2015. “The launch will be decided by availability of aircraft in a contiguous manner.”

Sharma, undeterred by one of the world’s costliest aviation markets, said he sees growing demand for air travel and reduced capacity as some airlines in India are struggling. Singapore Airlines, partnering with the Tata Group, plans to fly its full-service Indian venture Vistara this year, while AirAsia India Pte began operating a low-cost carrier in June.

Sharma, who ran Sahara Airlines before it was sold to Jet Airways in 2007, said his experience in Indian aviation gives him an edge as he charts a path to profit. Air One currently offers charter services.

A320s identified by Air One earlier were snapped up by Tata-SIA Airlines Ltd, Sharma said.

Vistara is leasing 20 A320 planes from BOC Aviation Pte, the Singapore-based aircraft leasing unit of Bank of China Ltd. It plans to start a premium carrier which will take on state run Air India Ltd and Jet Airways India Ltd, which recently said it will scrap its low-cost venture.

The business travel market in the US$1.9 trillion economy is Asia’s fastest growing and projected to double by 2015, according to the Global Business Travel Association. — Bloomberg

This article first appeared in The Edge Financial Daily, on August 29, 2014.