New Delhi: IndiGo, India’s biggest airline by market share, has finalized the purchase of 250 Airbus A320neo aircrafts, from Airbus Indrusties. The deal is worth $26.55 billion at list prices. The budget airline has now ordered 530 A320 family planes in all, from Airbus, the plane maker said in a statement on Monday.
Boeing has projected that narrow-body aircrafts, which are used on flights of up to around five hours, will account for 70 percent of all planes required over the next 20 years. The A320neo is the re-engined and upgraded variant of the A320 family of planes and competes against Boeing’s upgraded 737 Max in the narrow-body market segment.
Airbus is ahead in the narrow body aircraft segment. Boeing has secured 2,831 orders for its 737 Max plane, according to data on its website, while Airbus said that it has over 4,100 orders for the A320neo with this order. It is also the second-largest order by value for Airbus.
IndiGo would start taking delivery of the new Airbus planes from 2018 until 2026, the airline’s president, Aditya Ghosh, told Reuters. As with previous orders, Indigo will perform sale and leaseback transactions on the majority of the aircraft bought from Airbus, he said.
The deal makes IndiGo the largest airline customer for the Airbus A320-family of aircraft. Other large A320 customers include low-cost carriers such as Malaysia’s AirAsia and Indonesia’s Lion Air.
Founded in 2006 by travel entrepreneur Rahul Bhatia and Rakesh Gangwal, a former chief executive of U.S. Airways, IndiGo has placed a series of aggressive orders for Airbus jets as it tries to win a bigger share of India’s fast-growing aviation market.
India’s air travel market is forecast by the International Air Transport Association to become the third-largest around 2031 as millions start flying for the first time.
IndiGo flies one in three of India’s air travelers. Its owner, InterGlobe Aviation, filed in June a draft prospectus for an initial public offering. It had said in the prospectus that the terms of the 250 aircraft order had expired, raising concerns about the deal.