Boeing and Airbus compete for record jet orders from IndiGo

According to industry sources, IndiGo, a budget airline based in India, is reportedly engaging in discussions with Boeing and its present supplier Airbus to procure over 500 passenger planes.

Last month, French Finance Minister Bruno Le Maire revealed that IndiGo, India’s biggest airline, was on the verge of placing an order for several hundred planes from Airbus. The carrier has, up until this point, only purchased narrow-body jets from the European manufacturer, making them its exclusive supplier.

Sources have reported that negotiations to renew the budget carrier’s fleet at the end of the decade have expanded to include mid-sized wide-body jets. This has led to competition between Boeing’s 787 Dreamliner and the upgraded Airbus A330neo.

InterGlobe Aviation Ltd, the owner of IndiGo, is currently evaluating a significant order for narrow-body jets and is considering both the A320neo and the Boeing 737 MAX. However, they have not yet determined the specific breakdown between wide-body and narrow-body jets.

Airbus opted not to comment on these conversations, affirming that it maintains regular communication with its existing and prospective clients. Boeing, on the other hand, did not offer a prompt response.

With a commanding 55% stake in the domestic market, IndiGo is anticipated to continue its reliance on Airbus as its primary supplier of narrow-body jets. By sticking with Airbus, the airline aims to maximize cost-efficiency through economies of scale. Airbus’s top client, IndiGo, has ordered a staggering 830 Airbus A320-family jets, with 488 yet to be delivered.

Indian analysts expect that Airbus will encounter greater competition in securing the wide-body order. This is because IndiGo, which previously focused on single-aisle aircraft, recently diversified its operations into international markets by utilizing a Boeing 777 for its first wide-body aircraft.

RECORD DEMAND

Despite manufacturers struggling to meet output goals, Indian carriers are making efforts to keep pace with the world’s fastest-growing aviation market. This market serves what will soon become the largest population, and the carriers’ efforts have resulted in tumbling industry records.

Tata, the owner of Air India, secured agreements with Airbus and Boeing for an unprecedented number of 470 aircraft. Additionally, the company intends to lease an additional 25 planes to meet its current demands, resulting in a total acquisition of 495 airplanes.

According to Reuters, the CEO of budget airline Akasa Air announced that the company will be making a significant purchase of new narrowbody jets in addition to its existing order for Boeing 737 MAX. The CEO did not reveal how many planes they would order. Meanwhile, IndiGo is reportedly considering the purchase of approximately 500 jets following the closure of Air India’s deal, as reported by industry publication CAPA.

Previously, Indian aviation encountered obstacles such as airline bankruptcies, inadequate infrastructure, and uncertainties surrounding the authority of foreign leasing corporations that provide financial support for aircraft sales. Despite analysts’ concerns of a potential market overheating, Avolon, a prominent lessor based in Dublin, has declared that the situation has improved due to airport enhancements and consolidation, and predicts that India will continue to be a significant growth driver.

In 2006, Indigo commenced its operations and currently serves over 75 cities in India, including remote locations in the northeastern part of the country. Besides, the airline offers international flights to neighboring destinations like Dubai, Singapore, Hanoi, and Maldives. As part of its expansion strategy, Indigo has collaborated with Turkish Airlines to extend its services to Europe.

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