IndiGo signs $16-bn deal for A320neo, A320 planes

Low-cost carrier, IndiGo, has signed a $16-billion deal with Airbus to acquire 180 single-aisle aircraft. The firming-up of the order for 150 A320neo and 30 A320 planes follows the memorandum of understanding the carrier had signed with the European aircraft manufacturer in January.

The order makes IndiGo one of the A320neo-launch customers. Engine selection will be announced by the airline at a later date.

The planes will be delivered from 2015 onwards. The order for 180 planes is on top of a firm order for 100 A320s placed in June 2005.

Of that, 44 planes have already been delivered. The remaining 66 will be delivered by 2015. Last week, Wadia group-promoted GoAir said it was buying 72 A320neo planes.

IndiGo will focus on serving domestic and regional market and has no plans to launch flights to Europe, Africa or other long-haul sectors.

"All successful low-cost airlines such as South West or Jet Blue operate with single-aircraft type,'' IndiGo president Aditya Ghosh said.

The airline will finance the acquisition

through a combination of debt and sale and lease back options. All the 180 planes will be delivered by 2024.

The airline expects to receive 12-15 planes each year. Ghosh said it was, too, early to comment on the airline's fleet size by 2024. A chunk of the planes ordered today will replace the ones which the airline is operating now.

"Our order with Airbus will help establish IndiGo as a leading carrier, and one that continues to offer low fares and high service. Our existing order for 100 A320s and the order announced today will help meet India's growing flying market, in the most cost-efficient and environment-friendly way," he said.

"The aviation market is growing. Despite a population of 1.21 billion, India is an under-served market."

The airline has a market share of 19.9 per cent and is vying for the second spot in market share. Beginning September, the airline will launch international services from Delhi and Mumbai to Dubai, Bangkok and Singapore.

IndiGo also won  the "Best Low-Cost Airline" in Central Asia and India at the World Airline Awards held in Paris. The award was given based on an independent passenger survey carried out by Skytrax.