Tata-SIA JV orders Airbus A320s

Will get upto 20 A320s worth $1.83 billion at list prices

Singapore Airlines has chosen Airbus’s A320  to launch its new Indian joint venture with Tata Sons, scoring a victory over rival Boeing as the airline market in Asia's third biggest economy shows signs of a revival.

Sources familiar with the decision said a project team picked the European plane in preference to Boeing's 737 — the aircraft ordered by low-cost operator SpiceJet to expand its fleet in a deal reported by Reuters on Tuesday.

The demise of Kingfisher Airlines in 2012 marked an end to the bitter competition that led to low ticket prices for Indian consumers and high levels of losses for its airlines. The subsequent drop in aircraft capacity gave the airlines some breathing space, allowing them to raise fares and return to profitability. Two years later, despite a slowing economy, international and passenger demand has continued to grow.

That, and a liberalisation of Indian regulations that now allow foreign airlines to invest in local ventures, means that two new carriers will begin operations in 2014.