Aerospace & Defense

Airbus Nabs Order for 300 New Planes From Indian Low-Cost Airline

New Delhi-based IndiGo Airlines has placed a firm order for 300 Airbus A320 and A321 passenger jets valued at more than $33 billion at list prices. The order is among the largest ever for Airbus, surpassed only by an order for 430 new planes in 2017 from U.S. lessor Indigo Partners (no connection to IndiGo).

The budget carrier already has placed orders for 280 A320neo and 150 A321neo passenger jets and received 89 of the former and six of the latter, according to the Airbus orders and deliveries book. Because IndiGo flies Airbus jets exclusively, Boeing Co. (NYSE: BA) had no chance at this contract.

According to the Airbus announcement, the order includes an unspecified mix of A320neo, A321neo and A321XLR aircraft, taking the carrier’s total number of Airbus planes to 730.

Airbus CEO Guillaume Fleury commented:

We are grateful for this strong vote of confidence as this order confirms the A320neo Family as the aircraft of choice in the most dynamic aviation growth markets. We are pleased to see our aircraft allowing IndiGo to take full advantage of the predicted growth in Indian air travel.

IndiGo has not made a decision on which of two available engine options it will pick for the 300 jets. The first deliveries were powered by United Technologies Corp. (NYSE: UTX) Pratt & Whitney geared turbofan engines. The Pratt & Whitney engines met their fuel economy specifications, but also coughed up more than a few thorny reliability issues that have been compounded by India’s hot, humid climate.

In June, IndiGo announced switched 280 of the outstanding orders to a rival engine (the CFM LEAP-1A) made by CFM International, a joint venture of General Electric Co. (NYSE: GE) and France’s Safran Aircraft Engines. The CFM order has been valued at $20 billion.

Even though Boeing had no realistic shot at this order, IndiGo’s addition of the A321XLR is yet another nail in the coffin of a Boeing new mid-market airplane, called the NMA for years now. Given Boeing’s tribulations with its 737 Max, there is no chance a new NMA will be approved this year and only a slim chance that one will get the go-ahead next year. The NMA may, in fact, have a better chance of being declared dead than of remaining on life support for another year or more.

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