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Editorial

IndiGo Orders a Record 250 Airbus A320neo Aircraft

Airbus says the Deal is its Second Biggest Globally

IndiGo has ordered 530 Airbus A320 family Aircraft beginning 2005

By Prabhat K Ghosh

Published: August 2015

New Delhi. India’s biggest airline IndiGo has ordered 250 next generation Airbus A320neo aircraft to be delivered over eight years from 2018 to 2028.

This is the single-biggest order by an airline from India, and the second biggest for the Toulouse-based European consortium Airbus Group. In list prices, the order is worth around $26 billion, but the actual figure could be much less due to the large number of aircraft and the fact that in aviation industry, the cost of an aircraft can go down by 30 to 50 per cent during negotiations. A lot depends upon the configurations also.

Airbus now has more than 4000 orders for the A320neo aircraft. With better fuel efficient engines, improvements in aircraft design and use of lighter materials, the aircraft should be 15 per cent more fuel efficient than the current models.

The A320 family operates with two engines. The neo, or New Engine Option, aircraft versions are to be powered either by Pratt & Whitney PW1000G or CFM International LeapX engines. IndiGo is yet to select the choice for the engine, according to company President Aditya Ghosh.

Notably, the cost of engines, generally, can constitute up to or around 25 per cent of the cost of an airplane.

IndiGo, a low cost carrier operating mostly within India, is known for its neat and clean cabins, pleasant crew, and on-time performance. All its aircraft are from Airbus.

With more fuel efficient aircraft in operation, and in terms of passenger traffic scale, the IndiGo should be able to offer competitive airfares in the coming years, Mr Ghosh said.

(In a later development, Indigo filed its financial results to Directorate General of Civil Aviation (DGCA) indicating a net profit of Rs 1,304 crore for the fiscal 2014-15, and that it has 96 aircraft and another 430 on order).

Airbus issued a statement, pointing out that the agreement was signed on August 15, marking India’s 69th Independence Day. IndiGo is also celebrating its 9th birthday, and is appropriately charting its growth with future expansion towards 1000 aircraft.

Significantly, the airline is shortly going to public to sell company shares and boost its value to around $4 billion.

According to the Airbus statement, India’s largest domestic airline by market share, IndiGo has celebrated its ninth birthday by firming up its last year’s commitment and ordering 250 A320neo Family aircraft.

Mr Ghosh said: “This new order further reaffirms IndiGo’s commitment to the long-term development of affordable air transportation in India and overseas. The additional fuel efficient A320neo aircraft will enable us to continue to bring our low fares and courteous, hassle free service to more customers and markets and will create more job opportunities and growth. The IndiGo team is even more energised and excited than ever before to herald this new phase of our growth for many years to come.”

IndiGo placed an order in 2005 for 100 A320s which have all now been delivered. In 2011 IndiGo became the first Indian operator to commit to the A320neo bringing their total to 280 Airbus aircraft. With today’s announcement, IndiGo has ordered 530 A320 Family aircraft with Airbus.

(Some aircraft are on lease, and returned but the fleet stays modern as new aircraft come in. Overall figures accordingly change periodically).

“It fills us with pride that IndiGo, India’s largest airline and one of the early launch customers for the A320neo, is coming back for more of our benchmark aircraft. This order confirms the A320 Family as the airliner of choice in the most dynamic aviation growth markets. We thank IndiGo and its Co-Founders, Rakesh Gangwal and Rahul Bhatia for their tremendous vote of confidence,” said John Leahy, Airbus Chief Operating Officer, Customers.

The A320neo “new engine option” incorporates many innovations, including latest generation engines and large Sharklet wing-tip devices, which together deliver 15 per cent in fuel savings from day one and 20 per cent by 2020. This is equivalent to a reduction of 5,000 tonnes of CO2 per aircraft per year.

The statement said: The A320 Family is the world’s best-selling single aisle product line with over 11,800 orders to date and more than 6,600 aircraft delivered to 400 customers and operators worldwide. With this order the A320neo order backlog is catapulted to over 4100 aircraft, clearly underpinning its market leading position. Thanks to its widest cabin, all members of the A320 Family offer the industry’s best level of comfort in all classes and Airbus’ 18-inch wide seats in economy as standard.