IndiGo finalises order for 250 Airbus A320neo planes

IndiGo has finalised its order for 250 Airbus A320neo planes, billed as the largest single order for the European plane maker.

At list prices, the order is valued at $25.7 billion though typically customers get discounts on aircraft deals. The purchase contract was signed on Saturday.

A memorandum of understanding for 250 planes was signed last October. However, in its draft red herring prospectus filed with the Securities and Exchange Board of India in June the airline had said the MOU had lapsed.

IndiGo has 96 planes in its fleet and is the largest domestic airline with a market share of over 38%.

Before this latest order, IndiGo had made two mega orders for Airbus aircraft – 100 A320s in 2005, and 180 planes (30 A320s and 150 A320neos) in 2011. The 2011 order, though, was later modified to 180 A320neos.

In October, IndiGo President Aditya Ghosh said the deliveries under the new order would begin from 2018 and overlap with those under the 2011 one.

IndiGo follows a sale-and-leaseback model. While most of its planes are on lease for six years, a few are on financial lease for 10-12 years.

Ghosh said in a statement, “This new order further reaffirms IndiGo’s commitment to the long-term development of affordable air transportation in India and overseas. The additional fuel efficient A320neo aircraft will enable us to continue to bring our low fares and courteous, hassle free service to more customers and markets and will create more job opportunities and growth. The IndiGo team is energised and excited to herald this new phase of our growth for many years to come.”