Kingfisher places surprise Airbus order

New Delhi: Kingfisher Airlines Ltd placed a surprise order for 50 Airbus jets with a list price of up to $7.3 billion (Rs29,930 crore), more than double what the airline had been expected to order at this year’s Paris Air Show.
“It was a last-minute thing,”said A.Raghunathan, chief financial officer of the UB Group-owned airline. “Last Saturday night, the proposal came in and they were hardened as of today morning.”
But given the current market conditions and the financial troubles for Airbus SA, Kingfisher may have been able to negotiate a discount of up to 28% on the list price, said analysts who track Airbus’ parent, the European conglomerate EADS. Neither Airbus nor Kingfisher would discuss the discount estimates, which, if accurate, mean the deal could be worth a little over $5.25 billion, including up to $1 billion for Rolls-Royce engines on 25 of the jets.
“We got a good deal,” said Raghunathan. “We are Airbus’ biggest customer today. So, we were able to leverage a better deal from them.”
The Kingfisher purchase is a shot in the arm for Airbus, which has been struggling to keep up with its rival, US-based Boeing Co., in the wide-body jet market. Airbus will likely announce $45.7 billion worth of orders and memorandums of understanding this week in Paris, according to Airbus chief operating officer John Leahy.
21/06/07 Mehul Srivastava and Tarun Shukla/Livemint

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Categories: Airshow Paris 2007, Foreign Jun 2007, Kingfisher Jun 2007