NEW DELHI (AP) – Boeing Co. has won a firm order for 10 jets from India’s Air Sahara, a company official said Monday, as the U.S. aircraft maker doubled its forecast for India’s airplane demand amid a boom in the country’s air travel.
The deal with Air Sahara for the 737-800 jets is valued at $700 million on list price, said Dinesh Keskar, Boeing’s senior vice president of sales for South Asia and Southeast Asia. Delivery of the planes will start in mid-2009, Keskar said.
Air Sahara, one of India’s leading private airlines with a fleet of 27 Boejing jets, is trying to ramp up operations after a merger with Jet Airways, the country’s largest private carrier, failed two months ago because of a delay in regulatory approvals.
“We are proud of the long-term relationship we have had with Air Sahara,” Keskar said.
Air Sahara’s market share in India reportedly dropped to 8 percent from 13 percent after it entered into the merger deal with Jet Airways, but officials at the airline said they are hoping for a recovery.
“This order reflects our confidence both in the growth of India’s aviation market and Air Sahara’s modernization and expansion plans,” said Alok Sharma, the airline’s president.
The availability of low-cost airlines coupled with rising middle-class incomes and a booming economy have led to a surge in air travel in India. Domestic passenger traffic is growing 25 percent annually, driving demand for new jets.
Boeing said it has doubled its forecast for the India’s aircraft needs to 856 commercial jets worth more than $72 billion over the next 20 years.
Last year, the Chicago-based manufacturer had projected India’s demand for new jets over a 20-year period at a little over 400 planes worth $35 billion.
Keskar said recent changes in India’s aviation policy — such as the open sky agreement with United States — and and the success of several budget airlines launched over the past two years contributed to the revision in its forecasts. That the economy is growing at 8 percent annually also was a factor influencing the revision, he said.