Airbus might be on the verge of an enormous breakthrough, one that might potentially set a new record. It is closing in on a remarkable deal to sell approximately 500 A320neo family jets to IndiGo. The potential deal could dwarf the provisional purchase of 470 jets made by Air India in February. All these developments took place against the backdrop of an airline industry gathering in Istanbul.
A Grand Deal
Although Airbus’s published list prices peg the deal’s worth at around $50 billion, industry insiders predict that the final figure, following the standard hefty airline industry discounts for such large-scale deals, could drop to less than half of that amount.
Simultaneously, Airbus and its American rival, Boeing, are entangled in a separate negotiation. The objective is to sell either 25 A330neo from Airbus or Boeing 787 wide-body jets to IndiGo. However, all parties involved have decided to keep the commercial matters confidential.
IndiGo’s Growing Fleet
The deal’s significance isn’t just about its potential record-breaking magnitude. If confirmed, this order will rank as the largest single order from an airline in terms of units. IndiGo’s current fleet of Airbus A320-family jets stands at 830 units, with almost 500 still pending delivery.
These developments indicate a broader trend in the airline industry, as companies place orders worth billions of dollars extending beyond 2030. This strategy serves to secure supplies ahead of a predicted shortage.
Indian Market Surges
India’s booming airline industry, which boasts the second-largest order book, accounts for over 6% of the global industry backlog. These numbers are only outstripped by those from the United States, according to a Barclays report from June 1. However, some experts worry about potential over-ordering as airlines compete for the same pool of passengers.
IndiGo’s latest push arrives in a period of significant travel resurgence in India, the world’s third-largest aviation market, after the Covid-19 pandemic. High fares don’t seem to deter the surging passenger numbers.
The Future of IndiGo
IndiGo has set ambitious growth goals for the end of the decade, planning to double its capacity and extend its network, particularly to international markets. This aspiration is further underscored by its codeshare partnerships with seven carriers, including Turkish Airlines, American Airlines, and KLM.
As part of the alliance with Turkish Airlines, IndiGo has expanded its European footprint, offering flights to 33 European airports. In a notable shift from its previous single-aisle strategy, the airline commenced international operations to Istanbul with a Boeing 777, courtesy of its partner Turkish Airlines.
IndiGo’s interim strategy involves using two widebody aircrafts until it takes delivery of longer-range Airbus A321XLR planes around 2025.
IndiGo holds the top spot as the most significant operator of the Airbus A320neo with a current fleet of 164 A320neos and 79 A321neos. Additionally, they have a considerable number of aircraft on order, including 178 A320neos, 238 A321neos, and 69 A321XLRs.
The A320neo potential record-breaking deal between Airbus and IndiGo not only reflects the airline’s ambition but also the underlying resilience of the aviation sector as it recovers from the pandemic’s impact. The company’s vision to further expand its capacity and international presence promises exciting times ahead for the aviation industry.
Source: Reuters
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