Deccan buys $600 mn engines

India's first budget airline Air Deccan today said it has signed a $600 million deal to buy engines from British Rolls Royce-led consortium to power the 32 A320 passenger jets it acquired from Airbus Industrie.

The V2500 engines will be covered by a long-term Fleet Hour Agreement (FHA) taking the value to more than $600 million, officials of the consortium, International Aero Engine, announced at the Aero India air show here.

Air Deccan last month announced a $1.8 billion deal to buy 30 A320 aircraft to cater to the growing air passenger travel in the country. It will receive the first plane in 2007.

"This selection further underlines the appeal of the V2500 to operations of the Airbus A320 family and to low-cost carriers in particular," IAE President Mark King said.

Apart from Rolls Royce, the consortium has Canadian Pratt and Whitney, Japanese Aero Engines Corporation and MTU Aero Engines as members.

IAE said its V2500 engines powers more than 1,000 aircraft operating in the world.

Another aviation firm eyeing the demand in India for engines is French Aerospace firm Snecma. It announced plans to sell over 200 engines for various military and civil aircraft in India over the next five years.

"We have already sold over 100 engines in India. Our expectation is that the indian market will have another 200 engines in the next five years," Snecma South Asia national executive Vincent Gorry told reporters here last night.

Engines from Turbomeca, a Snecma group company, power the Mirage 2000 combat aircraft and the advanced light helicopter in the country.

He said the firm expects sales for engines not only for India's military helicopters and aircraft, like the Mirage 2000 and the Dhruv helicopters, but also in business jets used for corporate travel, which is becoming a fast growing segment in the country.

The engines cost anywhere between $5 million and $25 million, but Gorry declined to comment on the expected business from the Indian market.

Snecma in 2002 set up its Indian subsidiary/design and research centre at Bangalore with an initial investment of $4 million.

The firm is leveraging India's low-cost, high talent workforce to perform studies and develop engine components, aircraft equipment and onboard software at its Bangalore centre, besides working with Hindustan Aeronautics Ltd for sourcing components from the country.