Indigo close to 300-plane Airbus order

THE BUDGET AIRLINE IS CLOSE TO PLACING A NEAR-RECORD ORDER FOR OVER 300 AIRBUS A320NEO-FAMILY JETS WORTH AT LEAST $33 BN

NEW DELHI/PARIS: Indian budget airline Indigo is close to placing a near-record order for more than 300 Airbus A320neo-family jets worth at least $33 billion at recent catalogue prices t o cement its position as India’s largest carrier by market share.

People familiar with the matter told Reuters that Indigo, part of Interglobe Aviation, was finalising an order that would include Airbus’s newest jet, a long-range version of the singleaisle A320neo family called the A321XLR.

Indigo did not respond to a request for comment on Tuesday.

On Monday, a spokeswoman said there were no plans on the order front “as of now”. Airbus declined to comment.

The deal follows a fierce contest between Airbus and Boeing, which is seeking a new endorsement for its grounded 737 Max after British Airways owner IAG tentatively agreed in June to drop Airbus as its supplier and commit to 200 Max jets.

It comes days after Indigo’s biggest quarterly loss, with the company hurt by issues surrounding engines from a former supplier on A320neo-family jets already in the airline’s fleet.

A new deal for 300 A320neofamily aircraft would be worth $33 billion at the most recent list prices, published in 2018, but a deal of this scale would come in well below half that after discounts, according to aircraft valuation experts.

Airbus stopped publishing list prices earlier this year.

In Paris, shares in Airbus rose as much as 1.4% after Reuters reported the expected order.

RAPID TURNOVER

Many of the latest batch of aircraft are not expected to be delivered until mid-way through next decade, replacing others only just joining the Indigo fleet.

The carrier is known for turning over aircraft quickly to keep its average fleet age low, but such a strategy depends on overall strong demand in the jet market.

Indigo was among the first carriers to buy the re-engined A320neo in early 2011, in what Airbus at the time called a record single deal involving 180 aircraft. It went on to become one of Airbus’s largest customers after a series of orders.

Two years ago, an unrelated US private equity company called Indigo Partners placed a blockbuster order for 430 Airbus jets spread between four airlines, but the expected new Indigo order could be Airbus’s largest ever from a single carrier.

In 1997, US Airways placed an order for up to 400 Airbus A320 jets including options, but many were not delivered.