LE BOURGET—IndiGo and Airbus managed to stun the industry on the first day of the Paris Air Show with the firm order for 500 A320neo family aircraft—a headline number that is just so unusually big.
Digging deeper, there are a number of as yet-unanswered questions that are going to be important to Airbus and its suppliers as well as IndiGo’s competitors. Some of the answers will likely only become available over the coming years as the airline makes key supplier decisions below the aircraft level and pulls the trigger on what models within the A320neo family it picks.
Some fundamentals first. The aircraft are going to be delivered from 2030 to 2035, meaning an average of something between 80 and 100 aircraft per year—depending on the exact timing and whether Airbus will be on time. And this is just aircraft from the latest order. There will be outstanding deliveries into 2032 from the previous deals that today total just under 500 remaining deliveries. Measured against Airbus 2022 output, deliveries to IndiGo would be equivalent to at least 20% of its entire A320neo production.
Of course, Airbus has pledged to grow production in the coming years to 75 A320neo family aircraft per month. Even then, IndiGo would take up to 11% of annual production for a number of years—assuming Airbus does not go significantly higher, which is entirely possible over the coming years. Again, this is only measuring against the latest IndiGo order.
Delhi has made clear it expects Airbus to place more supplier work into the country as Indian carriers order more of its aircraft. Naturally, the most high-profile work is final assembly. But Airbus CEO Guillaume Faury made quite clear in Le Bourget that an Indian final assembly line (FAL) is not on the cards for the time being. The Airbus A320neo production system is complex enough for his taste with sites spread across three continents in Hamburg, Mobile, Tianjin and Toulouse. He also pointed out that even though China has an Airbus FAL, Airbus actually already employs more people in India. For now it is a case of wait and see.
Another question is whether IndiGo will actually take all these aircraft. In the past few years, the airline has been one of the very few Airbus customers that decided against deferring aircraft during the pandemic and stuck to the agreed timetable. It has a very young, almost all-Neo fleet as a result. So it is safe to assume that IndiGo would continue down that path.
The main question is whether India’s infrastructure will cope with the massive influx of aircraft: IndiGo’s additional 1,000 aircraft, another 470 at Air India and more likely across other LCCs such as Akasa. All the orders assume that India will invest substantially in airport infrastructure. That means adding capacity at existing airports and building new ones. There is a plan to add 80 fields in the next two years alone to cope with the expected growth. For Air India more than for IndiGo, expanding Mumbai and Delhi is key. The flag carrier would also like to add a third hub in South India. Another case of wait and see.
IndiGo has not made a decision on two key issues: engines and versions. The airline has been much-affected by the current Pratt & Whitney PW1100G durability problems and had, at times, around 40 of its A320neo family aircraft on the ground. That may give CFM International’s Leap 1A the edge, although similar less severe problems have been reported on the CFM-powered fleet.
As part of previous orders, IndiGo has commitments for 70 A321XLRs, according to the Aviation Week Network Fleet Discovery database. IndiGo CEO Pieter Elbers declined to say how many of the 500 additional aircraft were going to be XLRs. It is safe to assume that the airline will end up having well over 100 XLRs, if not 200 of the aircraft.
IndiGo will therefore have available a very large fleet of long-haul aircraft with sufficient range to cover all of Europe and Asia. It will therefore become a major long-haul player, even if it does not buy a fleet of Boeing 787s as rumored.
But there is a caveat to these long-haul ambitions: India needs to agree to more liberal bilateral air services agreements. The country recently held a summit with the European Commission in which the prospects of a comprehensive EU-India agreement were discussed. The Europeans came home with the impression that there is a chance for it, but that it won’t be a quick process. Again: Wait and see.
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