Royal buys 10 Boeing 737s

Air-India, Indian Airlines' buying spree sets the stage for more sales.

Boeing Co. announced a sale of ten 737-800 planes to Royal Airways and Brazilian aircraft maker Embraer signed an MoU with DRDO to develop an airborne early warning and control system (AEWC) as the five-day Aero India 2005 show began here today.

Royal Airways Ltd. will be paying Boeing $630 million for the ten aircraft that will comprise its new discount carrier, SpiceJet, fleet. Royal Airways has the option to buy 10 more 737-800s, the US commercial jet maker said in a statement.

Dinesh Keskar, president of Boeing's aircraft trading business, told Reuters that India's growing private airlines and fleet expansion plans by state-run Indian Airlines and Air-India had set the stage for more sales.

Jet Airways, opening an initial public offer of shares next week, was already a Boeing customer for 737 jets, he said, and a potential customer for long-range aircraft following India's recent decision to allow local private airlines to fly overseas.

Boeing's rival Airbus, a unit of Europe's EADS, had said on Tuesday that private Indian airlines offered immense scope for growth. Airbus made recent sales to both Air Deccan and Kingfisher Airlines, both part of a low-cost airline trend in India.

Meanwhile, on the defence front, Defence Research Development Organisation and Embraer have signed an MoU to develop an AEWC, using the Embraer 145 aircraft as the platform. It could result in India buying three of the aircraft to build AEWCs, the Brazilian firm said here at the Aero India 2005 show.

The Centre for Air-Borne Systems (CABS), a DRDO laboratory based in Bangalore, has held discussions with Embraer and was collecting technical data.

"The analysis is expected to result in an initial contract for three Embraer 145 AEWC aircraft and technical support during the development effort," Embraer said.

CABS has revived its airborne early warning system programme it had scrapped after a 1999 crash of a rotodome radar-fitted Avro aircraft near Arakkonam in Chennai.

It will integrate in the aircraft phased array radars in the current Rs 1,800-crore programme, which the cabinet committee of security sanctioned last year. Embraer could also sell five aircraft to India for VIP transport, company officials said.