IndiGo firms up order for 250 Airbus planes

IndiGo firms up order for 250 Airbus planes

IndiGo firms up order for 250 Airbus planes
Low-cost carrier IndiGo has firmed up its provisional commitment of buying 250 ‘A-320neo’ aircraft Airbus, the largest order in numbers for the European manufacturer that could cost up to $25.7 billion.

The airline had entered into a Memorandum of Understanding (MoU) on October 15 last year on the deal with Airbus, and now on August 15, both the companies have signed a purchase agreement.

The mega order came at a time when the Indian aviation sector is still in the doldrums. However, market leader IndiGo, which is only one of two Indian airlines to run a profit, is trying to consolidate its position.

“IndiGo celebrated its ninth birthday by firming up its last year’s commitment and ordering 250 A320neo family aircraft. This historical aircraft purchase agreement was signed on the 69th Independence Day of India,” identical statements from Airbus and IndiGo said on Monday.

Though the Airbus website lists the cost of one A-320neo at $106.2 million as of January this year, it was $102.6 million when IndiGo signed the MoU. As per the MoU price, the deal could run up to $25.7 billion or Rs 1.54 lakh crore. However, the amount may be less as both parties are learnt to have negotiated on prices.

Indigo President Aditya Ghosh said the new order “further reaffirms” the airline’s commitment to the long-term development of affordable air transportation in India and overseas.

“The additional fuel efficient A320neo aircraft will enable us to continue to bring our low fares and courteous, hassle-free service to more customers and markets and will create more job opportunities and growth. The IndiGo team is energised and excited to herald this new phase of our growth for many years to come,” he said.

Airbus Chief Operating Officer (Customers) John Leahy said it fills them with pride that IndiGo, one of the early launch customers for the A320neo, is “coming back for more of our benchmark aircraft.”

IndiGo placed an order in 2005 for 100 A320s, all of which have now been delivered. In 2011, IndiGo ordered 100 A320ceo aircraft. The same year, it became the first Indian operator to commit to the A320neo aircraft by ordering 180 of them. Deliveries are yet to start on the 280 aircraft order. Indigo currently has a fleet of 97.

According to Airbus, the A320neo ‘new engine option’ incorporates many innovations, including latest generation engines and large sharklet wing-tip devices, which together deliver 15 per cent in fuel savings from day one and 20 per cent by 2020. “This is equivalent to a reduction of 5,000 tonnes of CO2 per aircraft per year,” Airbus said.