India's Kingfisher Airlines to Buy 30 Airbus A320s

Kingfisher Airlines (search), an Indian budget airline backed by the country's largest beer company, said on Saturday it had signed a deal with Airbus to acquire a total of 30 A320 jets for $1.8 billion.

Kingfisher, which expects to start its operations by the end of April, announced in July it had agreed to buy four Airbus A320s (search) and had options to acquire eight more.

"The carrier has exercised 6 options, making a total of 10 A320s on firm order with options of a further 20 new aircraft," the company said in a statement. "Kingfisher expects to take delivery of these A320s at a rate of up to 9 aircraft per year until 2008."

It will operate a fleet of 8 new Airbus aircraft in 2005 and plans to add 8 A320s to its fleet in 2006, the statement said.

Kingfisher Airlines is the brainchild of flamboyant tycoon Vijay Mallya (search), whose UB Group makes Kingfisher beer (search), India's largest selling brand.

The airline has already leased four A320s from French company Debis Air Finance. Kingfisher has appointed Calyon as its financial adviser to negotiate and secure financing for the acquisitions.

Mallya had earlier indicated that the cost of flying will be lower than economy class travel on full-service airlines such as Jet Airways, state-run Indian Airlines and Air-Sahara, and marginally more than the "bus services" from low cost competition.

Despite a booming economy, India has a small air travel market due to steep fares inflated by high fuel taxes and other industry levies. Most of its billion-plus people, consequently, are forced to use the cheaper and subsidised rail network.

But stiff competition between existing carriers has triggered price cuts that helped the domestic air travel market to expand 26.5 percent in the first half of this business year to March 2005.