Airbus strikes record deal to sell 500 planes to India’s IndiGo

Airbus has secured the biggest aircraft order in history after sealing a multibillion-dollar deal to sell 500 narrow-body planes to India’s IndiGo.

The deal for Airbus’s A320 family of jets is the largest by number of aircraft and surpasses rival Air India’s order for 470 Airbus and Boeing aircraft placed in February. It is also bigger than IndiGo’s current fleet of 300 aircraft.

The world’s largest plane maker did not disclose the financial details of the deal which was announced by executives on the first day of the biennial Paris Air Show, which is meeting for the first time after a four-year gap amid resurgent passenger demand. 

“No one has ever [placed] an order of this magnitude,” said Pieter Elbers, chief executive of IndiGo, adding that it “speaks to the potential of Indian aviation and the ambitions IndiGo is having”.

IndiGo is already the world’s biggest customer of A320neo jets. The agreement takes the total number of Airbus aircraft on order by the carrier to 1,330. Monday’s firm order for 500 jets will be delivered between 2030 and 2035. Elbers said the company “expects to double in size between today and the end of the decade”. 

He declined to disclose how the 500 order would be broken down between Airbus’ different A320 models. The airline has not yet made its engine choice. 

Founded in 2006, IndiGo has risen to become India’s biggest homegrown airline by passenger numbers, with well over half domestic market share — 56.8 per cent in March, the most recent official statistics available. 

In an aviation market which has been marked by frequent boom and bust cycles, analysts say IndiGo stands out for its focus on costs and customer focus, which has revolutionised the sector.

Rising incomes and a strong post-pandemic economic bounceback have fuelled hopes for India’s aviation industry, one of the world’s fastest-growing. Passenger numbers for the first three months of this year surpassed the same quarter in 2019 by 5.8 per cent, climbing to 37.5mn, according to official data. 

Airbus said last week that it expected growth to be strongest in Asia, led by India, which remains the world’s fastest-growing market, and China. The company forecasts that the global fleet will more than double to 46,560 aircraft in 2042 from a pre-Covid level of 22,880 units at the start of 2020.

The agreement, said Airbus chief commercial officer, Christian Scherer, “symbolises the enormous potential that the Indian market represents”. 

Some analysts, however, expressed concern at the size of the orders being placed. 

“Heavy dependence on orders from Indian airlines is not as much a positive as you think for this sector,” said Sash Tusa, analyst at Agency Partners.

 “A lot of the underlying assumptions about traffic growth are based on winning back regional traffic from the Gulf carriers which are already very entrenched, and highly competitive.”

Separately, Airbus on Monday also confirmed that Saudi airline Flynas had firmed up an order for 30 more A320neo family aircraft.