IndiGo upgrades 125 orders of A320neo jets for a bigger sister model

Airbus SE's latest monthly order tally signaled a big change for India’s IndiGo. The planemaker’s biggest customer for the A320neo is upgrading 125 of its existing orders for the narrowbody’s bigger sister model.

Indigo, one of the few Indian carriers with enough cash to aggressively expand, has been mapping out a way to build a long-haul, low-cost business taking passengers from places like New Delhi to London, with a stop in, say, Istanbul. It’s been weighing whether to place an order for Airbus’s A330neo or Boeing Co.’s 787 wide-bodies, but the bigger narrowbodies it just converted to could help satisfy that requirement -- especially if the carrier opts to take the longer-range A321 variant.

IndiGo, operated by InterGlobe Aviation Ltd., last month poured cold water on the prospects of buying twin-aisle jets, saying that such a purchase “remains more of an aspiration than a plan.” The airline, based near New Delhi, has ordered 430 A320neo family jets, and is due to take its first A321neo later this month.

For Airbus, it’s another boost for an aircraft that is eating up much of a market that Boeing wants to try capture with its potential upcoming NMA, or New, Mid-Market Aircraft.

At the same time, the high demand for the bigger Airbus jet is stretching its production facility in Hamburg where the A321 is primarily built, and putting pressure on Airbus’s goal to hand over 800 total aircraft to customers this year.

“Hamburg has had to take the brunt of that A321 rate increase, which has also stressed some of the supply chain that is very, very much involved on A321,” Air Lease Corp. Founder Steven Udvar-Hazy said on an earnings call this week.