Small Indian carrier places huge order with Airbus

Small Indian carrier GoAir has placed a contract valued at $7.2-billion to purchase 72 airplanes from Airbus – a reflection of soaring aircraft demand in the subcontinent.

GoAir’s Managing Director Jeh Wadia told reporters that the order of A320 aircraft will increase the company’s total order book with Airbus to $9.6 billion.

The deliveries will commence in 2015. It is believed the carrier with receive 15 planes every year.

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.

“We are evaluating various fund-raising options [for the deal]. It will be a combination of debt and equity.”

Wadia also said that his company’s expansion will not be hampered by rising fuel costs.

“We are very positive about the aviation industry. There is huge potential,” he said.

For the time being, Wadia said GoAir has no plans to enter international flying routes.

According to reports, India’s surging economy (which is climbing at 9 percent annually) and burgeoning middle-class is prompting more demand for air travel.

As such, the Indian government is seeking to upgrade its crumbling airport infrastructure and has already revamped the hubs of New Delhi, Bangalore and Hyderabad.

Reportedly, India’s biggest private airline, Jet Airways (JET.NS), will also enter into an aircraft contract with Airbus at the Paris Air Show later this month.

In early 2011, another Indian carrier IndiGo made history when it secured a contract to buy 180 planes from Airbus in a deal valued at $15.6-billion – the largest such arrangement ever in commercial aviation.