Agence France Presse

Bangalore, February 9:

US aerospace giant Boeing has received an order for 10 of its 737-800 passenger jets worth $630 million from new Indian budget airline Spicejet, company officials announced today.

“Spicejet has placed a firm order for 10 planes valued at $630 million at list prices and has options for 10 more. The first delivery is scheduled for 2006,” Boeing Aircraft Trading president Dinesh Keskar said.

Spicejet would begin domestic air services in May with three leased Boeing 737-800s, he added.

The no-frills airline plans to offer fares 30-40 per cent below those of full-service carriers. It said it would keep overhead costs low by selling food and beverages on flights.

Spicejet is one of nine low-cost Indian carriers which have applied for licences in the past year as the country allows industry competition to cut fares and bolster air travel.

“Boeing has been in India for long and we have seen the lost-cost phenomenon is here to stay. There is room for airlines such as Spicejet in India,” Keskar said.

India has just 15 million people who travel by air annually against three million passengers who fly daily in the United States, even though the population of the US is around one-quarter that of India.

Spicejet’s order for Boeing planes comes a day after Air Deccan, another Indian budget airline, ordered 30 new aircraft from Europe’s ATR (Avions de Transport Regional) in a deal worth $528 million.

SpiceJet director Ajay Singh said his company had secured the first round of funds worth more than a billion rupees ($21.7 million) from private investors and institutional investors.

“The purchase of the 189-seater all economy class aircraft will be done through financing from international instutions,” Singh told AFP.

Jet Airways, Sahara and Air Deccan are the leading private players in the domestic sector, with Kingfisher Air, owned by liquor baron Vijay Malliya, planning to join the race from May.

Air Deccan and Kingfisher have placed orders for planes with Boeing’s rival Airbus Industrie within the past two months.

Kingfisher Airlines signed a deal worth up to $1.8-billion to buy 30 Airbus aircraft — 10 on a firm basis with options to acquire the rest. In December, Air Deccan signed a $1.8-billion-deal to acquire 30 Airbus A320 aircraft.