Chennai-based newcomer to sign a pact with Airbus worth $106.2 million

Premier Airways, a Chennai-based airline, is in talks with the European aerospace company Airbus to make a big purchase.

Premier Airways is planning to buy 40 Airbus A320 neo planes at a listed value of $4.3 billion, as revealed in an Economic Times. After IndiGo's 100 plane purchase in 2005, this could be the second biggest acquisition by a new comer.

The A320neo (New Engine Option) is the latest upgraded version of Airbus' single aisle aircraft family. According to the manufacturer's official statement in January this year, the latest listed price of the plane is $106.2 million. The actual deal value will, however, depend on discussions between Premier and Airbus and could come down after negotiations, given the size of the deal.

Premier Airlines have got the Ministry of Aviation's approval to induct the planes around October. It is now awaiting a nod from the Reserve Bank of India (RBI), post which, purchased documents will be signed and pre-delivery payments would be structured. Going by Airbus' current order backlog for the A320 neo, Premier would likely get its first delivery only in 2019-20 if the deal is finalised.

Airbus vice-president (strategy and marketing) Kiran Rao told ET that the company is in final stage of discussions with Premier. However, when the financial daily approached Uma Pinaghapani, the chairman of the European aircraft manufacturer, via an email to confirm this report, it failed to derive any response.