IndiGo’s order for 300 jets from the A320neo family, including the XLR long-range variant, sets it up for a sustained expansion and could help consolidate its lead in India, the world’s fastest-growing major aviation market last year. Asia’s biggest budget carrier by market value has ordered more than 800 Airbus
jets in the past 15 years as it embarks on an ambitious overseas expansion.
“IndiGo may be trying to gain beneficial pricing in a difficult sales year,” said George Ferguson, a senior aerospace analyst at Bloomberg Intelligence. That “obscures a poor year for aircraft sales, as airline profits slow in most markets except the U.S.”
IndiGo has specialized in bulk orders since it started operations in 2005, helping it win big discounts and lucrative maintenance deals with Airbus.
The airline typically sells aircraft to lessors and then leases back, making a profit in the process and keeping a young fleet that consumes less fuel.
The airline, founded by ex-US Airways Chief Executive Officer Rakesh Gangwal and former travel agent Rahul Bhatia, has quickly outpaced rivals in India. Yet the picture isn’t entirely rosy: IndiGo posted its biggest-ever quarterly loss last week and the two billionaire founders are engaged in a legal battle.
The Indian aviation market has lured the likes of Singapore Airlines Ltd. and AirAsia Bhd. to set up local units. But provincial taxes make the subcontinent one of the most expensive places to buy jet fuel and intense competition has often driven fares below cost, making profits elusive for most airlines.