Airbus flies high, lands biggest-ever contract for 430 A320s | business news | Hindustan Times
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Airbus flies high, lands biggest-ever contract for 430 A320s

Company’s total order book should now increase to more than 7,000, giving it enough work for around nine years

business Updated: Nov 16, 2017 16:26 IST
People check an A330 neo mockup at the Airbus stand during the Airshow in Dubai, United Arab Emirates.
People check an A330 neo mockup at the Airbus stand during the Airshow in Dubai, United Arab Emirates.(AP)

Airbus announced its biggest-ever order on Wednesday, signing a deal to supply 430 of its medium-range A320 family of aircraft to US investment firm Indigo Partners, at a list price of $49.5 billion (42 billion euros).

“An order for 430 aircraft is remarkable,” said Airbus chief operating officer, John Leahy.

“But it’s particularly gratifying to all of us at Airbus when it comes from a group of airline professionals who know our products as well as the folks at Indigo Partners do.”

The announcement sent Airbus’s share price soaring, rising by more than 3.0 percent to 86.09 euros in a generally softer market. It gave up some of its gains, showing a gain of 1.7% in afternoon trading in Paris.

Airbus’s Fabrice Bergier told AFP at the Dubai Air Show, where the announcement was made, that the contract was a “new sign of confidence” in the European planemaker’s jets.

“It’s an overwhelming success for Airbus and its A320 aircraft,” he said.

The order is for 273 A320neos and 157 A321neos, the revamped and more fuel efficient version of Airbus’s most popular single aisle passenger jet, the A320.

Indigo Partners’ found and chief Bill Franke said the deal “underscores our optimistic view of the growth potential of our family of low-cost airlines,” Frontier Airlines of the US, JetSMART of Chile, Volaris of Mexico, and Wizz Air of Hungary.

The final amount of the contract was not revealed, since it is customary for aircraft manufacturers to grant rebates on the list price, depending on the volume of the order.

A man passes by an A330 neo mockup at the Airbus stand during the Airshow in Dubai. (AP)

But the contract will more than double Airbus’s current order book for this year, which had stood at 288 planes at the end of October. It will also place Airbus, with a total 718 orders this year, ahead of its arch-rival Boeing which has 605 orders.

It will bring the total number of orders for the A320 to more than 13,700 since the aircraft went into service in 1988, making it one of the best-selling planes in aviation history.

Airbus’s total order book should now increase to more than 7,000, giving it enough work for around nine years at the current rate of production.

More fuel-efficient

The A320neo and A321neo jets feature new generation engines that use 15 percent less fuel compared to their peers.

The total number of orders for A320neos since the aircraft was launched in 2010 now stands at more than 5,500.

By comparison, rival Boeing has received more than 4,000 orders for the different versions of its equivalent aircraft, the 737 MAX. The deal marks a major coup for Airbus COO Leahy, who is expected to leave the group soon at the end of a career in which he oversaw the sale of nearly 15,000 planes.

Separately, Airbus said Dublin-based CDB Aviation leasing company had firmed up an order for 90 A320neo family aircraft with a list price of $5.1 billion. A preliminary order of 45 planes had been placed in 2014 and a subsequent one in June.

So far at the Dubai Air Show, Airbus has been very much overshadowed by Boeing.

The European plane maker had been hoping to announce the signing of another major contract for more than 30 of its flagship long-haul jet, the A380, to Emirates Airlines.

But the deal has not been announced so far and negotiations are ongoing, even if it could nevertheless still be announced in the coming weeks or months.

By contrast, on Sunday, Emirates Airlines agreed to purchase 40 Boeing 787-10 Dreamliners for $15.1 billion at list price, its chief Sheikh Ahmed bin Saeed al-Maktoum said.

Emirates is already the world’s largest client for Boeing’s 777, with 165 jets and another 164 on firm order.

Not long after Airbus unveiled its contract, Boeing announced an order from Gulf airline flydubai for 225 medium-haul 737 MAX aircraft with a list price of $27 billion, hailing it as the “largest-ever single-aisle jet order” from a Middle East carrier.