IA finalises $2.5-billion deal with Airbus

Indian Airlines today placed an order for 43 Airbus Industrie aircrafts. The deal, valued at. $2.5 billion, was signed between PM manmohan Singh and France's president Jacques Chirac, who commenced his three-day India visit on Sunday.

Under the deal, Indian will purchase A319, A320 andA321 aircraft. The French aircraft manufacturer will commence deliveries from the last quarter of this calendar year.

India's civil aviation sector has been growing between 25 and 30 per cent in recent years and has witnessed a growth of new private aircraft operations who have cut in to the state-owned IA's market share. In addition, IA has been hit by falling revenues because of the fare wars launched by the new operators.

As the domestic air travel market grows, with discounted fares attracting a growing number of middle-class travellers, India represents a profitable market for Airbus and rival Boeing, who have been engaged in fierce dogfights for the Indian market.