Indian airline IndiGo has placed a record-breaking order with Airbus for 500 narrowbody aircraft, indicating a strong belief in the continuing boom of the world's most populous country. This significant announcement was made at the Paris Air Show, giving Airbus an advantage over rival company Boeing Co., who was not present. IndiGo's CEO, Pieter Elbers, said the company would take delivery of the aircraft models between 2030 and 2035. The airline will most likely mix its fleet between the smaller A320neo and larger A321neo versions of aircraft.
Elbers stated in a press conference that no one had ever ordered such an amount of aircraft at once, overshadowing even Air India's purchase of 470 aircraft from Airbus and Boeing a few months prior. This sizeable order brings IndiGo's backlog to almost 1,000 planes. Indian carriers are ordering many planes to keep up with the growing air traffic demand.
IndiGo has gone from being a startup to India's dominant carrier with a market share exceeding 60% in just two decades. Air India is also vying for a part of the market, having reinvented itself under new ownership with a fleet purchase plan to expand its possibilities. Bloomberg reported earlier this year that Akasa, which began flying in 2020, is exploring financing to make a follow-on order with Airbus.
Margins in the Indian aviation market are thin, making it a fiercely competitive space with hardly any room for error. GoAir filed for insolvency earlier this year due to engine durability issues with its A320 fleet.
For Airbus, this deal cements its growing hold on the crucial single-aisle space, which is the most flown aircraft category. Airbus plans to have 10 final assembly lines for its A320 family jets by 2026 after including a second line in China. Guillaume Faury, Airbus CEO, assures that rising production will not delay deliveries to IndiGo. Airbus plans to raise output to 75 monthly units in the future but does not plan to add a final assembly line in India.
IndiGo is already the largest customer for A320neo aircraft and has plans for expansion. The airline aims to double its size and scale before the end of the decade and increase operations in Central Asia. The fleet expansion will also help India's ambition to become a connecting hub. The government is encouraging airlines to operate more long-haul aircraft, while investing $12bn into airport buildouts.
Airbus predicts that aviation's "center of gravity" will shift towards Asia, with India and China being the driving factors for growth. Faury said that IndiGo has given Indian people the opportunity to fly for the first time and called it "the airline of reference" for the Indian market.