DUBLIN Jan 22 Singapore-based BOC Aviation
looks poised to supply aircraft to India's latest airline as new
players jostle to capture growth in Asia's third-biggest
economy, two industry sources said.
The move is an important step in plans by Tata Sons and
Singapore Airlines to set up a full-service airline to
compete for business amid India's crowded low-cost market.
Reuters first reported last week that the new Tata-SIA
venture had opted to use Airbus A320 jets in preference
to Boeing's 737.
The fleet of 20 planes would initially be sourced from
leasing companies, rather than purchased direct from Airbus.
That decision triggered a race for the lucrative mandate
between aircraft leasing companies gathering in Dublin for
annual industry meetings this week.
Industry sources who asked not to be named said the deal, or
a significant part of it, was expected to go to BOC Aviation,
the aircraft leasing subsidiary of Bank of China.
BOC Aviation and Airbus declined to comment.
"At this moment all that we can confirm is that Tata-SIA
will be taking 20 A320 Airbus aircraft on a lease basis," a
spokesman for the airline said by email.
"The leasing company and terms can't be disclosed at the
moment as commercial discussions are on and may take a few weeks
Planemakers frequently rely on lessors to supply spare
capacity and establish their brand with new airlines, hoping to
sell future batches of planes directly if the carrier expands.
Leasing companies are often able to supply aircraft from
their own speculative inventories at shorter notice than the
manufacturers, whose production lines are sold out years ahead.
India is seen as a promising market due to the relatively
low proportion of people already flying, but is also one of the
world's riskiest due to aggressive price competition.
However, analysts say price-cutting has eased since the
collapse of Kingfisher Airlines.
Based on current expectations, Tata-SIA will start flying in
the second half of 2014, as will an AirAsia-Tata joint venture
in the low-cost market, another Airbus operator.
The two airline launches have extended Airbus's dominance of
the Indian market for small passenger jets.
Boeing operator Jet Airways is however still in negotiations
to buy around 50 737 jets, industry sources said.
The airline, which has been the subject of speculation about
the order for over a year, did not respond to requests for
comment. A spokesman for Boeing declined to comment.
Low-cost carrier SpiceJet has meanwhile re-ordered 42 Boeing
jets, Reuters reported last week.