Low-cost carrier Air Deccan is close to finalising a deal to buy 68 engines from a a Rolls Royce-led consortium. The total deal size is expected to be around $500 million (nearly Rs 2,200 crore).
A source close to the development said the airline would buy these engines - V2500 type - to power its 30 Airbus. Deccan is expected to start getting delivery of these 30 aircraft from next month.
Air Deccan managing director G R Gopinath was not available for comments. The airline, which is likely to hit capital market with an initial public offer, had placed a similar order for engines last year to power 32 aircraft.
A consortium called International Aero Engines consortium produces the V2500. Rolls-Royce is the leader of the consortium. Other partners are Pratt & Whitney of the US, the Japanese Aero Engines Corporation and MTU Aero Engines of Germany.
Sources said going by the price of a V2500 engine of $11 million, the deal would cost Air Deccan around $500 million, excluding some discounts to be enjoyed by the airline.
Earlier, Vijay Mallya promoted Kingfisher Airlines had placed orders $500 million to power its Airbus family of aircraft. In addition, yet-to-be-launched low-cost carrier, IndiGo had placed orders worth $6 billion for powering its 100 Airbus family aircraft.
According to industry analysts, V2500 engines offers better fuel-burn performance compared to other engines with improved payload and better performance retention to longer on-wing life. "The noise and emission levels of V2500 engines are with in the permissible limit," they pointed out.
Meanwhile, Air Deccan has laid the foundation stone for its first owned hangar at the Chennai Airport. This hangar facility would provide basic and medium-level maintenance checks.
The hangar is expected to be ready for operation in about 8-12 months. Since its inception in August 2003, Air Deccan flies to 55 destinations plying 230 flights a day, making it the airline with the largest network in the country. Besides, being the only airline connecting some sectors such as Belgaum, Dehradun, Gwalior, Hubli, Jabalpur, Kanpur, Kohlapur, Nasik, Rajahmundry and Vijaywada. Till date, Air Deccan has flown over 4 million passengers.
