Airbus pips Boeing for Tata-SIA aircraft order: report

Singapore Airlines (SIA) has picked the Airbus A320 aircraft over Boeing's 737 series for the launch of its Indian joint venture with Tata Sons, according to a Reuters report citing sources familiar with the decision.

The full-service carrier will take up to 20 A320s worth $1.83 billion at list prices. The planes will be sourced from leasing companies, rather than purchased direct from Airbus, the report adds.

A project team set up by SIA evaluated both aircraft and went for the European Airbus rather than the American Boeing. The decision extends Airbus's domination of India's single-aisle aircraft segment.

Both SIA and Airbus declined official comment on the report.

The new airline, which has not yet been formally named, is expected to begin operations in the second half of this year. It has begun recruiting pilots and is close to confirming its top executives, including an SIA executive as its chief executive officer.

The airline will initially operate domestic services from New Delhi and compete with full-service carriers Air India Ltd and Jet Airways (India) Ltd, which are the only players in the full-service market since the collapse of Kingfisher Airlines Ltd in 2012.

Around 70 per cent of the Indian domestic market is dominated by low-cost carriers such as IndiGo, SpiceJet Ltd and GoAir. Tata is also starting a low-cost carrier joint venture with Malaysia's AirAsia Bhd, increasing the competition in this segment.