Indian low-cost airline enters into agreement with Airbus

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IndiGo

Indian low-cost airline IndiGo said Wednesday it had signed an agreement with Airbus for 250 A320neo planes, the biggest single order ever placed with the European manufacturer by number of aircraft.

IndiGoWhile the value of the order was not disclosed, the A320neo has a list price of 102.8 million dollars, which would in theory make the deal worth over 25 billion dollars.

“This new order reaffirms IndiGo’s commitment to the long-term development of affordable air transportation in India and overseas,” IndiGo president Aditya Ghosh said.

“The agreement will become Airbus’ single largest order by number of aircraft,” Airbus said. IndiGo has previously bought a total of 280 Airbus aircraft over several years, 100 A320s and 180 A320neo planes.

The agreement was signed at the Airbus headquarters in France’s Toulouse, reports said.

Ghosh told broadcaster NDTV that deliveries of the 180 planes IndiGo ordered in 2011 will begin from next October, while the deliveries of the 250 aircraft will begin in 2018.

Airbus has picked up more orders for planes than US rival Boeing this year so far, with requests for 1,062 planes. Almost 11,000 planes from the A320 family have been sold in total.

IndiGo, founded only in 2006, is India’s largest airline with a market share of 32.6 per cent.

India’s civil aviation sector has seen massive expansion over the past decade and its market has the potential to become the biggest globally by 2030, according to the KPMG consultancy.

The number of Indian airline passengers has grown by some 13 per cent annually over the last decade, according to the Airports Authority of India, to 159 million in 2013.

Ghosh denied that Indigo was being too ambitious at a time when many Indian carriers were making losses.

“We are one of the most under-penetrated aircraft markets in the world. For a country of a billion people we have less than 400 commercial planes. China took in around 250 fresh airplanes last year itself,” he said.

“The problem that some of the other players face is with profitability, which has nothing to do with the demand side of the market,” he said.
GNA

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