European airline consortium Airbus Industrie said on Wednesday that it has signed a memorandum of understanding with Vijay Mallya promoted new low-cost carrier Kingfisher.

Airbus marketing chief John Leahy, while speaking to reporters at the Farnborough International air show, said that Kingfisher plans to purchase four single-aisle A320s and has an option to buy eight additional A320s.

Airbus said the deal is worth an estimated $240 million or euro 195.14 million.

Kingfisher is also in talks with aircraft leasing companies concerning four additional A320s, an Airbus statement added.

Deliveries of the leased aircraft will begin in the first quarter of 2005, while those of the new aircraft from Airbus will start in the last quarter of 2005.

"We plan to have a 'fly the good times' approach to offering our passengers a unique on-board experience as well as value for money," said Mallya, chairman of UB Group, adding, "Airbus A320's spacious cabin and attractive economics will be our key to delivering both."

Airbus' A320 family is the acknowledged technological leader in the single-aisle class, with advanced features such as fuel-saving wingtip fences, weight-saving composites, and the reliability that comes from its modern design and ease of maintenance. It also consistently leads in independent passenger and operator surveys.