IndiGo Set to Break Records with Potential Order of 500 Airbus Jets
IndiGo Poised to Make Aviation History with Landmark Airbus Deal
5 June 2023
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Kunal Tyagi
IndiGo is set to potentially acquire 500 narrow-body A320-family jets from Airbus, surpassing Air India's previous order of 470 aircraft.
The deal, valued at approximately $50 billion, is expected to be heavily discounted due to bulk purchases.
IndiGo, holding a 56% share of the domestic Indian market, is yet to receive nearly 500 jets from its existing order of 830 Airbus A320-family planes, making it one of Airbus's top customers.
IndiGo, the leading airline in India, is on the verge of achieving a momentous milestone in the aviation industry with a potential agreement to procure 500 narrow-body A320-family aircraft from Airbus, as disclosed by industry insiders. If finalized, this deal would surpass Air India's provisional purchase of 470 planes in February, making it the largest single-airline order in terms of unit count.
Based on Airbus' published prices, the estimated value of this agreement stands at $50 billion. However, given the substantial bulk purchase, the final cost is anticipated to be significantly discounted, amounting to less than half of the listed amount. Concurrently, discussions are underway between Airbus and Boeing to potentially sell 25 A330neo or Boeing 787 wide-body jets to the same airline.
During his attendance at the International Air Transport Association's annual meeting in Istanbul, Pieter Elbers, the Chief Executive of IndiGo, refrained from commenting on commercial matters, indicating that negotiations are still in progress and subject to confidentiality. Both Airbus and Boeing have also chosen to withhold official statements at this time.
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IndiGo currently enjoys a commanding 56% share of the domestic Indian market and has been engaged in discussions with both Airbus and Boeing regarding this significant order. It is worth noting that the airline is still awaiting the delivery of nearly 500 jets from its existing order of 830 Airbus A320-family aircraft, solidifying its position as one of the top customers for the European manufacturer.
The demand for aircraft has experienced a significant surge as airlines strive to secure future supplies well in advance. This trend has resulted in Airbus and Boeing amassing orders worth billions of dollars that extend beyond the year 2030. In a recent report by Barclays, it was revealed that Indian carriers contribute to over 6% of the global industry backlog, making them the second-largest holder of orders worldwide, second only to the United States.
In pursuit of this remarkable growth, IndiGo has forged strategic codeshare partnerships with seven different airlines, including renowned names such as Turkish Airlines, American Airlines, and KLM. Through its alliance with Turkish Airlines, IndiGo has been able to expand its presence in the European market, offering flights to 33 airports across the continent. In order to cater to the growing demand until the mid-2020s when Airbus A321XLR planes are scheduled for delivery, IndiGo has temporarily introduced wide-body Boeing 777 aircraft acquired from Turkish Airlines.
The efforts undertaken by IndiGo in establishing codeshare alliances and incorporating larger aircraft reflect their commitment to meeting the rising demands of the industry while expanding their reach and enhancing passenger convenience.
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