IndiGo loves Paris.
IndiGo’s historic order of 500 aircraft has given a sizzling start to the 54th edition of the Paris Air Show (PAS’23).
Indian aviation aficionados would recall how the 2005 edition of this prestigious event was lit up by an unknown (at the time) Indian entity – IndiGo - ordering 100 aircraft even before its launch.
Today, IndiGo is the poster child of Indian aviation. With a fleet of over 300 aircraft, the airline is the largest airline in India and the seventh largest in the world.
However, it is far from being close to the size it aspires to attain. The airline is back in Paris - with a large shopping bag.
500 aircraft!
Globally, triple-digit aircraft orders are few and far between, and an order of this magnitude is staggering. This order is even more remarkable since pre-PAS’23, IndiGo had 480+ aircraft from previous orders yet to be delivered!
In fact, IndiGo now has the largest aircraft order book in the world in terms of number of aircraft.
It is also perhaps the first time in history that an airline has an order book nearly touching 1,000 aircraft.
It is no less remarkable that IndiGo’s entire fleet and order-book is for use under a single air operator certificate unlike the orders from the Lion Air Group, Wizz Air Group and Air India Group.
(* includes order placed in Paris Air Show’23 on 19 Jun 2023)
So, what has driven this massive order?
Competitive Pressure?
The airline industry's competitive landscape in India has changed dramatically since the privatisation of Air India. Unlike the situation in the last 15 years, IndiGo now faces a credible, potent, and sizeable competitor which has made its expansionist intention more than clear by placing one of the largest aircraft orders globally earlier this year.
IndiGo’s mega order, just a few months after Air India’s landmark order, is being viewed by some as a competitive reaction to Air India’s threat. However, history suggests otherwise. As evident from the chart below, for IndiGo, periodic and progressive large orders are very much a character.
Vision 2030.
The airline has a vision to double its size and scale by 2030. This vision translates to the addition of 300 - 350 aircraft in seven years. Since a large number of aircraft deliveries will be utilised for replacements, it is evident that a majority of its order backlog (pre-Paris Air Show’23) will be exhausted by 2030.
Hence, the current order may be a timely step to power the airline’s growth beyond 2030.
In Conclusion.
IndiGo's latest order - the largest purchase agreement in the history of commercial aviation - has its foundation in India's air traffic potential.
Source: Airbus GMF 2023
With India expected to continue as the third largest aviation market and also as one of the fastest growing aviation markets globally in the next decade, this order will certainly pave way for yet another evening in Paris.
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