IndiGo has firmed up its commitment for 250 Airbus A320neo aircraft. The deal marks the biggest ever order (by number) for Airbus. At list prices the order is worth $26.6 bn, but after standard discounts the order can probably be valued at $13.3 bn. IndiGo’s share in the Airbus A320neo backlog now exceeds 10%.
IndiGo is one of the fastest growing airlines in India and already secured a market share of 40% on the Indian domestic market. Currently the airline operates 97 Airbus A320ceo aircraft. With the order IndiGo boosted its aircraft on order by 138% and can quadruple its fleet in the near future.
The Airbus A320neo has 9 more revenue generating seats and can carry 189 passengers, while it burns 15% less per seat. With the Airbus A320neo in its fleet IndiGo will increase revenue, while simultaneously fuel costs are brought down. By 2020 fuel burn per seat will be 20% lower, which will results in millions ($) of savings for the airline.
Market forecast India
Just days prior to the IndiGo order Boeing increased its market forecast for the Indian market to 1,740 aircraft, but with Airbus dominating the fastest growing segments of the market it can be questioned how much Boeing will benefit from the increased forecast.