The largest airline in India, IndiGo, said on Monday that it had ordered 500 Airbus A320 Family aircraft. This order surpasses Tata-owned Air India’s previous record of 470 aircraft, which had been achieved in March.
The historic agreement aims to further strengthen IndiGo’s dominance in India, the third-largest aviation market, as well as to support international expansion. Additionally, after a pandemic-induced slump, air travel has recovered, and Asia is witnessing a sharp rise in consumer expenditure and a love for flying.
An official statement read, “With the latest agreement, IndiGo now has 1,330 Airbus aircraft on order, solidifying its position as the largest A320 Family client in the world. Additionally, the most recent deal will give IndiGo a continuous flow of supplies between 2030 and 2035.
The board had already approved an order for 500 Airbus aircraft from InterGlobe Aviation, the parent firm of IndiGo, which is thought to be worth $50 billion at the most recent list prices for Airbus aircraft.
Given the usual use of huge discounts to such large purchases, the order’s actual cost is anticipated to be considerably lower.
In the presence of V. Sumantran, chairman of the board of IndiGo, Pieter Elbers, CEO of IndiGo, Guillaume Faury, CEO of Airbus, and Christian Scherer, chief commercial officer and head of international for Airbus, the purchase agreement was signed on June 19 at the Paris Air Show 2023.
The historical nature of IndiGo’s recent order for 500 Airbus A320 Family aircraft cannot be overstated. IndiGo is able to carry out its purpose to continue fostering economic growth, social cohesion, and mobility in India because to an orderbook of approximately 1,000 aircraft that extends well into the next ten years, according to Pieter Elbers.
This deal will be the largest in aviation history, surpassing Air India’s record-breaking acquisition of 220 Boeing aircraft and 250 Airbus aircraft in March. The agreement should strengthen IndiGo’s intentions for fleet development by ensuring an ongoing supply of new aircraft for the ensuing ten years.
With a commanding 56% share of the domestic Indian market, IndiGo has seized a disproportionate market share as competitors struggled. IndiGo has taken use of its expansive fleet to introduce new flights. In reality, IndiGo’s most recent purchase solidifies its place as one of the prestigious European company’s biggest clients at a time when it has not yet received roughly 500 of the 830 Airbus A320-family aircraft it has already ordered.
“With this extra solid order for 500 aircraft for the years 2030–2035, over 1.000 aircraft still need to be delivered for IndiGo well into the following ten years. The A320NEO, A321NEO, and A321XLR aircraft in this IndiGo order-book are mixed, the firm noted.
The A320 Neo family includes the highly efficient and technologically advanced A320 Neo, A321 Neo, and A321 XLR aircraft.
According to IndiGo, the airline will be able to maintain its strong focus on reducing operational costs and achieving fuel economy thanks to the fuel-efficient A320NEO Family aircraft. The young and fuel-efficient fleet will support IndiGo in realising its sustainability goals, adding to the 21% CO2 reduction between FY16 and FY23 that has already been achieved.
Airlines have placed multiple aircraft orders as a result of the substantial uptick in air travel following the Covid crisis, which has led to soaring order books for Airbus and Boeing.
However, a global supply chain disruption has delayed the construction of new aircraft, causing carriers to project A320Neo aircraft deliveries until the end of the decade. Demand for this model, which is regarded as the most sought-after single-aisle aircraft, has been high.
At the moment, IndiGo serves 75 international city pairings with flights to 26 overseas locations. According to IndiGo CEO Pieter Elbers, the airline wants to increase its proportion of international seats from 23% in FY 23 to 30% over the next two years.
Additionally, according to Bloomberg, who cited insider sources, the Indian carrier is aggressively looking at a second acquisition of widebody aircraft, with Airbus and Boeing vying for a prospective contract involving about 25 aircraft. Although the talks are still in progress, Boeing may have an advantage because to its highly praised 787 Dreamliner.
As airlines secure future supplies in the face of impending shortages, Airbus and Boeing have been accumulating billions of dollars in new contracts that span beyond 2030.
IndiGo is unwavering in its conviction that its better cost-efficiency strategy would put it ahead of rivals as the Indian aviation sector faces consolidation, despite facing competition from a resurgent Air India under the Tata group.
