• Friday, May 24, 2024


IndiGo Close To 300-Plane Airbus Deal: Sources

An Indigo aircraft (Photo: LAKRUWAN WANNIARACHCHI/AFP/Getty Images).

By: Radhakrishna NS

INDIAN budget airline IndiGo is close to placing a near-record order for more than 300 Airbus A320neo-family jets worth at least $33 billion (£26) at recent catalogue prices to cement its position as India’s largest carrier by market share.

People familiar with the matter told that IndiGo, part of InterGlobe Aviation, was putting the finishing touches on an order that would include Airbus’s newest jet, a long-range version of the single-aisle A320 type called the A321XLR.

IndiGo did not immediately respond to a request for comment on Tuesday (29). On Monday (28), a spokeswoman said there were no plans on the order front “as of now”. Airbus declined to comment.

The expected deal caps a contest between Airbus and Boeing, which seeks a new endorsement for its grounded 737 MAX after British Airways owner IAG tentatively agreed in June to drop Airbus as its medium-haul supplier and commit to 200 MAX.

It comes days after IndiGo’s biggest quarterly loss hurt by engine issues on its earlier A320neo jets.

A new deal for 300 A320neo-family aircraft would be worth $33bn at the most recent list prices, published in 2018, but a deal of this scale would come in well below half that after discounts, according to aircraft valuation experts.

Airbus stopped publishing list prices earlier this year.

IndiGo was among the first carriers to buy the re-engined A320neo in early 2011.

Two years ago, an unrelated US private equity company called Indigo Partners placed a record order for 430 jets spread between four airlines, but the expected new IndiGo order could be Airbus’s largest ever from a single airline.

In 1997, US Airways placed an order for up to 400 Airbus A320 jets including options, but many were not delivered.

IndiGo has expanded rapidly to claim almost half the Indian market as rivals such as bankrupt Jet Airways fall by the wayside. Its closest competitor is SpiceJet, a Boeing operator.

However, its two co-founders, Rakesh Gangwal and Rahul Bhatia, have been embroiled in a dispute about corporate governance of the airline that shows no signs of easing.

In June, IndiGo dropped its original engine supplier, United Technologies unit Pratt & Whitney, in favour of French-US engine venture CFM by agreeing a record $20bn deal for more than 600 engines to power Airbus jets already on order.

CFM is jointly owned by France’s Safran and General Electric of the US.

Indian regulators on Monday ordered IndiGo to modify its 16 earlier Airbus A320neo aircraft fitted with Pratt & Whitney engines, which have been linked to in-flight shutdowns, to avoid their grounding.

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