IndiGo signs $15.6-billion Airbus deal
India’s largest low-cost airline, IndiGo, has made history by signing the single largest order for big jets in commercial aviation industry. The Gurgaon-based carrier said that it had sealed a $15.6-billion deal to buy 180 aircraft with a capacity to carry about 150 passengers each.india Updated: Jan 12, 2011 23:50 IST
India’s largest low-cost airline, IndiGo, has made history by signing the single largest order for big jets in commercial aviation industry. The Gurgaon-based carrier said on Wednesday that it had sealed a $15.6-billion (around R 70,000 crore) deal to buy 180 aircraft with a capacity to carry about 150 passengers each.
IndiGo sources said the airline was planning an initial public offer (IPO) of shares to fund the purchase that would make it the launch customer for the A320neo, the latest from the Airbus stable.
As many as 150 of the jets would belong to the neo series, and the rest standard A320s.
IndiGo, which plans to go international, will complete five years of local operations in August, meeting a key requirement for local airlines to fly overseas. The low cost carrier had last month displaced Air India to become the country’s third largest airline with a market share of 17.3%.
The A320neo, available from 2016, incorporates new, more efficient engines and large wing-tip devices called “Sharklets” that deliver significant fuel savings of up to 15%, besides a sharp cut in harmful emissions.
“This order for industry-leading fuel efficient aircraft will allow IndiGo to continue to offer low fares” Rahul Bhatia, group managing director of InterGlobe Enterprises and Rakesh Gangwal, co-founders of IndiGo, said in a statement.
The airline signed a memorandum of understanding for the contract late on Tuesday. The planes will be delivered between 2016 and 2025 after Indigo takes delivery of all 100 planes from a previous order.
Engine selection will be announced at a later date, the airline said.
Shares of EADS, Airbus’s parent company, hit a three-year high on the news and had risen by 4% in early morning trade in European markets.
With its fleet of 34 new Airbus A320 aircraft, IndiGo offers 221daily flights connecting 24 destinations. It plans to launch international services on 15 sectors.
Bhatia said A320s were appropriate for the airline to meet India’s growing needs while keeping costs and environmental harm at low levels. IndiGo has made a strategic choice for Airbus jets to help maintain efficiency.
“This order positions IndiGo to take full advantage of the predicted growth in Indian air travel and we are delighted that they continue to build their future with Airbus,” said John Leahy, chief operating officer, customers at Airbus.