India’s biggest low-cost carrier and one of the biggest airlines in the country, IndiGo and Airbus have announced a record-breaking deal with for 300 A320 family aircraft, including the newest member of the family, the A321XLR. At list prices the deal is valued at $33 billion, however, as per usual when such big deals are made, price concessions are to be expected. Yet just recently, the Indian airline announced another record-breaking event – its biggest quarterly loss in the company’s history.
As of September 30, 2019, the low-cost carrier operates 225 Airbus A320 family aircraft, according to the latest Airbus Orders and Deliveries report. The newest order will take the total IndiGo backlog of A320 jets to 730.
“This order is an important milestone, as it reiterates our mission of strengthening air connectivity in India, which will in turn boost economic growth and mobility”, commented the Chief Executive Officer of IndiGo, Ronojoy Dutta. “India is expected to continue with its strong aviation growth”, Dutta added, noting that IndiGo aims to “deliver on our promise of providing low fares and a courteous, hassle free experience” to travelers.
In Q1 2019, the airline was the third biggest airline in terms of international passenger traffic in India, standing just below Air India and the now-bankrupt Jet Airways, accounting for 8.8% of market share, reports India’s Directorate General of Civil Aviation (DGCA). On the domestic front, as of August 31, 2019, out of the total 94 million passengers that have traveled on routes within the country, IndiGo carried 44.1 million passengers – a market share of 46.9%, according to DGCA data.
Nevertheless, the carrier’s financial situation is not great. On October 24, 2019, the LCC reported a Q2 FY2020 net loss of $149.50 million (INR 10.6 billion). A large portion of the losses is attributed to delays in A320neo deliveries, forcing the airline to operate its older A320ceo jets, which are becoming more and more pricey to maintain due to upcoming engine checks.
Yet IndiGo still believed in Airbus, as the CEO of the European manufacturer, Guillaume Faury expressed that the company is “grateful for this strong vote of confidence” from IndiGo, ”as this order confirms the A320neo Family as the aircraft of choice in the most dynamic aviation growth markets”, Faury added.