In the single-largest aircraft deal in global aviation history, low-cost carrier (LCC) IndiGo has announced an order to acquire 180 Airbus A-320 aircraft at an estimated cost of Rs 70,200 crore ($15.6 billion). The planes will be delivered between 2016 and 2025.
Even though the airline did not reveal how it would bankroll the purchase, analysts said it could go for an initial public offering.
This is the second time that IndiGo has placed such a massive aircraft order. In 2005, India’s second-largest airline announced it would buy 100 A-320s at a cost of $6 billion. It has received 34 of those aircraft and the rest will join its fleet by 2015. At the time, the order was one of the largest by a domestic carrier.
IndiGo recently pipped Air India for third position in terms of domestic marketshare after Jet Airways and Kingfisher Airlines. It is expected to take the second spot soon. IndiGo will complete five years of domestic operations in August and become eligible to fly international.
IndiGo’s memorandum of understanding with Airbus Industrie inked on Tuesday evening for single-aisle aircraft includes 150 eco-efficient ‘Neo’ series planes, which are yet to be produced, making it the launch customer for the series. The remaining 30 are for standard A-320s.
The A-320 Neos would incorporate more efficient engines and large wing-tip devices called Sharklets that deliver significant fuel savings of up to 15 per cent, as well as reduce emissions and engine noise.
A-320 Neos come in two engine configurations, which IndiGo will decide on later. Airbus is likely to offer a choice of the latest engine model from CFM International, a joint venture between France's Safran and General Electric of the US, and an American Pratt & Whitney engine.
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The A-320 Neo is Airbus's bid to counter rival aircraft such as Canada's Bombardier C Series and China's C919, as well as the medium-haul B-737s of Boeing.
Other large aircraft orders include Dubai-based Emirates' decision to buy 32 A-380s last year at a list price of $11.5 billion, taking its total order for the Superjumbo to 90. Air India had in 2006 placed orders for 68 Boeing planes of different types, while Abu Dhabi-based Etihad ordered 55 planes from Airbus in 2008.