IndiGo places $6.5 bn order for 100 A320s

India keeps the ball rolling at Paris Air Show.

Little-known Interglobe Enterprises today placed the biggest ever aircraft order by an Indian company, for 100 planes, at the Paris Air Show.

The integrated travel company that holds the licence to operate the IndiGo airline, which plans to take off in six to nine months, placed firm orders for 100 Airbus A320s in a deal totalling $6.5 billion. This is one of the largest orders ever received by Airbus for any of its models.

The Paris Air Show, which saw major orders from Indian carriers, has been a big success for Airbus in terms of orders from India.

In total, Indian carriers have placed orders "" both firm and options "" for 135 aircraft with Airbus so far, while Boeing has managed orders for only 20. In terms of list price of these aircraft, the orders translate into $15 billion for Airbus and $4 billion for Boeing.

For IndiGo, this is an astounding change of heart. The company had said earlier this year that given the overcapacity in domestic aviation, it was not sure about its plans to start the airline.

IndiGo, jointly run by Gurgaon-based Rs 1,320-crore InterGlobe Enterprises Limited and former US Airways chief Rakesh Gangwal, plans to operate as a budget carrier.

"The aviation industry in India is on the threshold of the next big revolution and IndiGo is ideally positioned to fill the fast-emerging need for reliable, efficient and economical air travel," InterGlobe Enterprises Limited Managing Director Rahul Bhatia told Business Standard.

The airline is expected to fund the fleet acquisition through equity as well as debt financing. "The company will bring in Rs 350-400 crore as equity, to be raised from internal accruals and debt, to buy the aircraft. We will be flying to every possible location in India," said Bhatia.

As per the aircraft induction plan of the carrier, about six to eight aircraft will be inducted this year and the entire 100 aircraft will be inducted over the next 6-7 years. "We will have a new aircraft joining the fleet every month," Bhatia said.

"IndiGo is the result of extensive analysis and planning by very experienced airline executives and we are convinced it will be a successful new player in a market that is both large and fast growing," said Airbus president and CEO Noël Forgeard.

The announcement by the airline is keeping in line with InterGlobe's recent strategy to enter consumer segments with products and services that deliver value for money and rides on the back of its recent announcement of a joint venture with Accor to build the Ibis range of economy hotels in the Indian sub continent.

Established in 1989, InterGlobe Enterprises is a leading travel company in India with a presence in aviation management, travel related services, travel technology, travel distribution services and hotel development and management services.

InterGLobe's services 13 leading international airlines and offers services ranging from sales and marketing to revenue and route management. It also offers BPO services for the travel and aviation industries.

Headquartered in Gurgaon, InterGlobe has a network of 47 offices across 24 cities in India and abroad and employs 1,500 professionals.

New kid on the block

Indian carriers have placed orders""firm and options""for 135 aircraft with Airbus so far at the Paris Air Show, while Boeing has bagged orders for 20 aircraft.

In list price, the orders translate into $15 billion for Airbus and $4 billion for Boeing.