Thursday, July 06, 2023

What IndiGo's mega aircraft deal means for India's aviation industry

It was literally India’s moment at the Le Bourget airport, the site of the famed Paris Air Show. Of more than 1,000 aircraft ordered at the event, 970 were bought by Indian carriers IndiGo and Air India. Coming within five months of the national flag carrier Air India announcing its order for 470 aircraft (the purchase agreement for which was signed at the same air show), IndiGo also finalised an order for 500 aircraft from the Airbus 320neo family. As a result, the Gurugram-based low-cost carrier (LCC) not only surpassed the Air India order, but also established a new record for the single largest purchase agreement in commercial aviation. Reacting to the announcement, British Prime Minister Rishi Sunak said, “This contract is a major win for our aerospace sector. Airbus’s deal with IndiGo will be worth billions to the UK and support thousands of jobs across the country—helping to grow the economy.”

The new deal takes the total number of Airbus aircraft on order by IndiGo to 1,330 in the past 12 years. According to experts, the delivery of the new 500 aircraft, however, will start only after 2026. In an oblique reference to the carrier’s future growth strategy, CEO Pieter Elbers said, “The additional 500 [aircraft]… will help IndiGo move forward, to make sure that we live up to our promise and continue to build our unparalleled network, both domestic (India) and international.”

Not to be left behind, the country’s newest scheduled carrier, Akasa Air, also ordered four additional Boeing 737-8 MAX jets to support its international foray.

The record orders by IndiGo and Air India also spurred a discussion in the national and international press about who had struck a better deal. However, with both orders having been placed independently, the linkages or motivations behind them are speculative at best, say industry experts. “The IndiGo order in its current form is comparable to the 400 narrowbody aircraft ordered by Air India, against a total order of 470,” says Satyendra Pandey, Managing Partner at aviation services firm AT-TV.

06/07/2023 Manish Pant/Business Today

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