IndiGo places landmark Airbus order
NEW DELHI/PARIS: Indian budget carrier IndiGo has placed an order for 300 Airbus A320neo-family jets worth at least $33 billion at recent catalogue prices, handing the European planemaker what could be its biggest ever order from a single carrier.
“The mammoth deal includes Airbus’s newest jet, a long-range version of the single-aisle A320neo family called the A321XLR,’’ the country’s biggest airline said in a statement on Tuesday.
This will take IndiGo’s total A320neo family aircraft orders to 730 making it the world’s biggest customer for these planes.
“This order is an important milestone, as it reiterates our mission of strengthening air connectivity in India,” said chief executive Ronojoy Dutta.
The deal follows a fierce contest between Airbus SE and Boeing Co, which is seeking a new endorsement for its competing 737 MAX, grounded following two fatal accidents.
Airbus’ A320neo family competes directly with the 737 MAX and the European planemaker has a strong grip on the Indian market.
IndiGo’s announcement came hours after Reuters first exclusively reported the deal. It also came days after IndiGo said net loss grew to 10.66 billion rupees ($150 million) in the three months to Sept 30 from 6.52 billion rupees a year earlier, hurt by issues surrounding engines from a former supplier on A320neo-family jets already in the airline’s fleet.
In June, IndiGo dropped its original engine supplier, United Technologies Corp in favour of French-US engine venture CFM International by agreeing a record $20 billion deal for more than 600 engines to power Airbus jets already on order.
“The choice of engine manufacturer for this order will be made at a later date,’’ said Riyaz Peermohamed, IndiGo’s chief aircraft acquisition and financing officer.
A new deal for 300 A320neo-family 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.
Many of the latest batch of aircraft are not expected to be delivered until midway 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 has expanded rapidly to claim almost half the Indian market as rivals such as bankrupt Jet Airways fall by the wayside. Its closest competitor is budget carrier Spice Jet, a Boeing operator.
However its two co-founders, Rakesh Gangwal and Rahul Bhatia, have been embroiled in a dispute about corporate governance of the airline that shows no signs of easing.