Largest-ever aviation deal: IndiGo orders 500 Airbus A320 family aircraft

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IndiGo, India’s largest airline, on Monday placed an order for 500 A320 family aircraft with Airbus, making it the world’s largest single-class aircraft purchase.

Order for narrowbody aircraft such as the A320neo, A321neo and A321XLR will fuel growth plans in the next decade with deliveries taking place between 2030 and 2035.

The airline has not placed any orders for wide-body aircraft. IndiGo stated: “The engine selection for this order will be made in due course and will therefore be the exact mix of the A320 and A321.” While IndiGo selected Pratt & Whitney for its first batch of A320Neo aircraft, it chose CFM engines in 2019 and 2021. The CFM agreement covers 580 aircraft ordered by IndiGo in two tranches.

The purchase agreement was signed by Rahul Bhatia, Promoter and Managing Director of IndiGo. Venkataramani Sumantran, Chairman; and Peter Elbers, Chief Executive Officer (CEO), on the one hand, and Guillaume Faury, CEO of Airbus, and Christian Scherer, Chief Commercial Officer, on the other, at the Paris Air Show 2023.

The airline said that “IndiGo…has past orders totaling 480, which will be delivered between today and the end of this decade.” The company has 312 aircraft in its fleet. With this said, IndiGo’s order book contains close to 1,000 aircraft, to be delivered well into the next decade.

The order will be for both incremental growth and replacement and is seen as a way to secure the delivery pipeline as the Airbus order book fills quickly.

Four months ago, Air India ordered 470 aircraft: 250 with Airbus on board and 220 with Boeing.

With the IndiGo announcement, Indian Airlines has been pushed to become the second largest single-chip order in the world.

Elbers said it was hard to overstate the importance of IndiGo’s request.

He added that the aggregate demand enables IndiGo to fulfill its mission to further boost “economic growth, social cohesion and mobility” in India. “This order strongly underscores IndiGo’s belief in India’s growth, in the A320 family and in our strategic partnership with Airbus,” Elbers said.

Elbers had previously indicated that the airline would double in size and range by 2030. Doubling the fleet addition to 600 by 2030 would mean a net addition of more than 40 aircraft per year.

The airline operates 13,039 flights per week, which is about 13.3 percent more than a year ago, according to flight analytics firm Cirium.

This “historic” order marks a new chapter in the relationship between Airbus and Indigo, Shearer said, democratizing affordable air travel for millions of people in the world’s fastest-growing aviation market.

“It’s also a resounding endorsement of the best-in-class operating economics of the A320 family that have powered IndiGo’s growth for nearly two decades. We cherish our longstanding relationship with IndiGo and are proud of our success together.”

Aviation consultant Mark D. Martin said it was disappointing that the A350 and A330Neos were not in the deal.

In all likelihood, “we may not see 500 aircraft deployed in service in India. Effective deployment will remain at 300-350 with the rest of the aircraft on order, staged as part of the fleet replacement cycle every seven or 10 years,” he said.