Indigo Orders 500 Airbus Planes, Becomes Largest Indian Airline

How will the signing of an order for 500 Airbus A320neo family aircraft by IndiGo and Airbus impact Indian aviation?

Adrian

Nowakowski

June 19, 2023

PARIS — The first day of the 2023 Paris Air Show was historic with an announcement from Indian low-cost carrier IndiGo (6E) that it will purchase 500 Airbus A320neo family aircraft, marking the largest-ever order in Airbus history since its inception in 1970.

The delivery of the first units of this order is expected to occur as late as 2030 due to production queue delays caused by the high demand for air travel, so 6E anticipates requiring 100,000 more seats to meet the demand for air travel between India and the rest of Asia over the next decade.

Although neither party has confirmed the distribution or proportion of airframes involved, 6E has stated that the order includes Airbus A320neo, A321neo, and A321XLR variants.

Pieter Elbers, CEO at 6E, said of the announcement, "It is difficult to overstate the significance of IndiGo’s new historic order for 500 Airbus A320 Family aircraft. An order book now of almost 1.000 aircraft, well into the next decade, enables IndiGo to fulfill its mission to continue to boost economic growth, social cohesion, and mobility in India

"At IndiGo," he continued, "we take pride in being India’s preferred airline for connectivity in and with India, and by doing so, we are one of the leading airlines in the world. This order strongly reaffirms IndiGo’s belief in the growth of India, in the A320 family, and our strategic partnership with Airbus.”

The CEOs of Airbus and IndiGo posed for the media at the Paris Air Show event. Photo: Simone Chellin/Airways.

Record-Breaking IndiGo, Airbus

This is the largest aircraft order ever placed by any carrier for any bundle of Airbus aircraft. Currently, 6E owns more than 300 airframes from different manufacturers, including 39 ATR 72-600s, 21 Airbus A320-200S, 165 A320neos, 2 A321-200s, and 8 A321neos, along with one leased Boeing 777-300ER from Turkish Airlines (TK) on an exclusive contract.

The pace of 6E's fleet growth is so rapid that it plans to receive 20 new airplanes in the next few weeks alone, including a second Boeing 777 airframe from TK. With the addition of the 500 jets, the airline has secured an order book for almost 1,000 airplanes exclusively from the Airbus A320 family.

If no other home airline announces further orders for expansion, IndiGo will eventually become the largest airline in India by fleet. While the national flag carrier Air India (AI) confirmed acquiring 250 aircraft from Airbus in February, it is inconsequential compared to the landmark that 6E achieved at PAS2023.

India is currently on its way to becoming the largest single commercial aviation market in the world. Photo: New Delhi-Indira Gandhi Airport

The State of Indian Aviation

Airbus has been one of the leading aircraft manufacturers providing airlines with aircraft and other solutions in the rapidly growing Indian market for over 50 years. The Indian domestic market is expected to surpass major players such as China, Europe, and the United States in the coming years as it climbs to the top of the global population charts.

Indian Prime Minister Narendra Modi stated that the Indian economy is expected to further grow from the world's 5th to 3rd largest before the end of the decade. About aviation, Modi ensures that India will become a global aviation hub by building state-of-the-art infrastructure and developing cutting-edge aviation capabilities. By 2030, India will become a leader in aviation on the world stage.

Airbus has declared that their A320 Family is the airliner of choice in the discerning Indian market, with Delhi's Indira Gandhi Airport (DEL) being the largest hub for Airbus A320s worldwide. As a result, questions have arisen about the potential expansion of Airbus's presence as a manufacturer in the country.

The enormous Airbus presence in India has brought the final assembly line question to the desk at the event. Photo: Alberto Cucini/Airways

A Final Assembly Line in India?

Having factories situated in foreign territories for the final assembly lines (FAL) of aircraft is not a novel concept.

Recently, manufacturers such as Boeing and Airbus have inaugurated their FALs in China, which is another critical market for them. However, China is not growing as rapidly as India, and since the extensive trade wars between the regions starting in 2019, Western manufacturers have encountered even more difficulties in expanding to this Asian country.

Currently, Airbus operates a fully functional final assembly line in Tianjin, China, which oversees the completion and delivery of the Airbus A320 family and Airbus widebody aircraft, with a specific emphasis on interior installation. Airbus takes advantage of the lower salaries of Chinese workers through this arrangement while simultaneously strategically increasing its presence in such an important country.

Now that 6E has placed the most significant-ever order for any Airbus plane in India, it could potentially become a candidate for Airbus's next FAL. "We prefer to stay with the actual sites and to grow other parts of the equation and the business, especially on the development, engineering or research, continuous airworthiness, and that-s what we are doing in India," Faury added.

Let us not forget that Airbus already has a FAL operating in India, but it is situated in Gujarat and is entirely focused on the military CASA C-295 aircraft.

IndiGo has made history by starting the operation of a 524-seat Boeing 777 leased from Turkish Airlines. Photo: IndiGo

What's Next for IndiGo

One of 6E's most ambitious plans is its current endeavor to expand internationally. Although the airline has a dominant presence in India's domestic market, it has not yet established itself as a major player in the Southeast Asian international market. Currently, the airline offers flights to Vietnam, Thailand, Malaysia, Singapore, Sri Lanka, and the Maldives.

However, in the Middle East, IndiGo has a significant presence, operating connections to Oman, UAE, Qatar, Bahrain, Kuwait, and Saudi Arabia. Additionally, the airline has recently signed a leasing agreement with Turkish Airlines (TK) for two Boeing 777-300ER aircraft for exclusive flights to Istanbul Airport (IST). The airline has fully implemented its low-cost model on these aircraft, as the almost full-economy layout can accommodate up to 524 passengers.

The international expansion of IndiGo from India will undoubtedly depend on the Airbus A321XLR. Although the exact number of units of this aircraft to be added to the fleet is still not confirmed, the XLR's extended range will enable the LCC to explore more route possibilities. IndiGo is optimistic about commencing operations in Europe soon.

The first trade day at the Paris Air Show was already full of attendees, media, and potential customers. Photo: Adrian Nowakowski/Airways

Airbus's Presence at the Paris Air Show

Airbus is showcasing its product line at the 2023 Paris Air Show, exhibiting an extensive range of aircraft families in partnership with other airlines. Attendees at the event will be able to find the Air France (AF) Airbus A220-300, JetBlue (B6) A321LR, Qatar Airways (QR) A319ACJ, and A350-1000, as well as the House-colored A321XLR and A350-900 demonstrator jets.

Your Airways team is covering live from the event and extends an invitation for you to keep up with the latest announcements and developments via our social media outlets on Instagram, Facebook, and Twitter.

Check out the IndiGo-Airbus Press conference below:

https://youtu.be/vh9zRaP5FBA

Featured image: Adrian Nowakowski/Airways