Airbus receives historic order of 500 planes from India’s IndiGo

Europe’s Airbus announced the biggest plane deal in history on the opening day of the Paris Airshow on Monday, with an order for 500 narrowbody jets from Indian budget carrier IndiGo.

The multibillion-dollar deal is the largest ever by number of aircraft, eclipsing Air India’s provisional purchase of 470 jets earlier this year as India’s two largest carriers plan for a sharp expansion in regional travel demand.

The deal follows months of negotiations first reported by Reuters.

“This is just the beginning, there’s more going forward. With the growth of India (and) the growth of the Indian aviation market ... this is the right time for us to place this order,” IndiGo Chief Executive Pieter Elbers told a news conference.

The aircraft will be delivered between 2030 and 2035.

Efforts by Indian carriers to keep pace with the world’s fastest-growing aviation market, serving the largest population, have sent industry records tumbling even though manufacturers are struggling to meet output goals.

Indian carriers now have the second-largest order book, with an over 6% share of the industry backlog, behind only the United States, according to a June 1 report by Barclays.

But some analysts have expressed concern that airlines could be over-ordering jets in pursuit of the same passengers.

After signing the IndiGo deal, Airbus CEO Guillaume Faury said it was premature to start thinking about narrowbody jet production rates higher than the planned 75 per month.

IndiGo, which accounts for nearly 60% of the Indian domestic market, was widely expected to keep Airbus as its supplier of single-aisle jets to squeeze out further economies of scale.

It continues to hold separate talks with Airbus and rival Boeing for 25 widebody planes, which could either be Airbus A330neos or Boeing 787 jets, sources have said.

French President Emmanuel Macron flew in to the packed aerospace bazaar by helicopter and watched a flying demonstration including Airbus’s latest jet development, the A321XLR, and air power including the French Rafale fighter.

On the civilian side, planemakers arrived with growing demand expectations as airlines rush for capacity to meet demand and help reach industry goals of net zero emissions by 2050.

But they also face a challenge to meet that demand as suppliers struggle with rising costs, parts shortages and a scarcity of skilled labour in the wake of the pandemic.

Industry executives say as many as 2,000 jet orders are up for grabs worldwide in a resurgent commercial jet market, on top of those provisionally announced already, as airlines try to fill a void left by sharp falls in activity in the COVID crisis.

Only a portion of these potential fresh deals will be ready in time for this week’s air show, which could see a mixture of new and repeat announcements, they said.

The air show is taking place under the shadow of the conflict in Ukraine, with no Russian presence in the chalets and exhibition halls in contrast to the last event four years ago.

Some Ukrainian officials and aerospace firms were expected to be present at the show.

On the defence side, Belgium said it would apply to join as an observer the potential successor to the Rafale and multinational Eurofighter, the Franco-German-Spanish FCAS fighter project, despite differences between industrial partners over whether to expand the project.

France’s Thales also announced a contract from Indonesia for 13 long-range air surveillance radars.

Looking ahead to the rest of the show, Airbus is expected to confirm that Qantas is exercising options for nine more A220s, as announced by the airline this year.

The planemaker is also close to a potentially large order for narrow-body jets from Mexican low-cost carrier Viva Aerobus, industry sources said on Sunday.

The number of planes being discussed was more than 100, they said, though by Monday some sources said the number in the final deal could settle closer to 60.

The Mexican carrier has long been a fierce battleground between Boeing and Airbus.

Separately, state-owned carrier Biman Bangladesh Airlines has decided to purchase 10 planes from Airbus, in a shift from its Boeing-dominated fleet, the South Asian country’s junior minister for civil aviation told Reuters on Monday.

“As per our requirement, the decision has been taken to purchase 10 aircraft in phases. The technical committee is assessing now,” Mahbub Ali said.

Ali’s comments came after sources said the airline was close to a deal to buy 10 Airbus A350 widebody planes, marking its first order with the French planemaker.

It was not clear whether the deal would be finalised in time for the Paris airshow, which opens on Monday.

Airbus declined to comment. Biman did not respond to a request for comment.

“Every country has both Airbus and Boeing in their fleet. We didn’t have an Airbus in our fleet,” Ali said, as the airline looks to break its reliance on the US planemaker that typically dominates widebody orders.

The 51-year-old airline has a fleet of more than 20 mostly Boeing planes, over half of which are widebodies, and some Dash-8 turboprops.

Agencies