An Indian airline signed a deal for the largest ever aircraft order in the history of the airline industry with French aerospace firm Airbus this week.
The aircraft manufacturing firm announced on June 19 that discount Indian airline IndiGo had placed an order for 500 of its family of A320 commercial jets, which are to be delivered between 2030 and 2035.
The deal sets “the record for the biggest single purchase agreement in the history of commercial aviation,” Airbus said in a statement.
The latest purchase brings the total number of Airbus planes ordered by IndiGo to 1,330.The historic purchase agreement was signed by Rahul Bhatia, managing director of IndiGo; Dr. Venkataramani Sumantran, chairman and non-executive independent director of IndiGo; Pieter Elbers, CEO of IndiGo; Guillaume Faury, CEO of Airbus; and Christian Scherer, Airbus chief commercial officer, at the Paris Air Show 2023, announced the aerospace firm.
Indian Airline Rapidly Expands Airfleet
Founded in 2006, IndiGo is the largest airline in India by market share, according to its website, flying 86 million customers in the last financial year.
The Indian airline was already a major Airbus customer and had ordered 830 A320 aircraft from three previous purchases in 2011, 2014, and 2019, in addition to the 500 new orders waiting to be delivered.
The major deal was rumored to be in the works in the days leading up to the Paris Air Show and exceeds the $68 billion 470 plane order from Boeing and Airbus by Air India in February.
"You can imagine how proud the moment this is for us at Airbus, and truthfully, for me personally, to be sitting here in such great company. It's been 18 years from nothing to where IndiGo is today. And, of course, we at Airbus are just incredibly, incredibly gratified and proud of this association that has brought democratization of air travel to India," Airbus Chief Commercial Officer Christian Scherer said.
"We're super proud of the very high degree of integrity and efficiency with which IndiGo is running the airline and its fleet of A320s and A321s. And, of course, today marks just another landmark moment transaction in a relationship that is far greater than just airplane deals."
IndiGo projects that its international share of orders will grow to nearly 30 percent in the coming years.
Sixty-nine of IndiGo's outstanding Airbus orders are for the A321XLR, which completed its first test flight one year ago and is expected to enter into service next year.
IndiGo was not the only airline to place an order during this year's Paris Air Show.
Air Mauritius also ordered three Airbus A350 aircraft for its fleet, bringing its future A350 fleet to seven, while the Saudi airline Flynas ordered 30 Airbus A320neo family aircraft, including ten A321XLRs. As of June 19, Airbus rival Boeing has yet to announce any orders.
South Asian Nation Seeing Massive Growth
IndiGo CEO Pieter Elbers, said that the order would help the company “fulfill its mission to continue to boost economic growth, social cohesion, and mobility in India.”
About 75 percent of IndiGo’s flights travel to domestic destinations in India.
Elbers explained that India's "expanding economy and rising disposable incomes continue to add millions of first-time flyers to a booming aviation market."Aviation companies are eager to capitalize on India’s strong economy and its booming population, which may well translate into higher demand for air travel further down the line.
Meanwhile, major tech companies are rushing to do business in India, with many planning to expand production and open new stores there, to take advantage of the booming market.
The International Monetary Fund in April said that India will be one of the best performing economies this year, with 5.9 percent growth in GDP.
The United Nations also estimated that month that the South Asian nation was on track to overtake China as the world’s most populous nation by mid-2023, with 1.43 billion people.