IndiGo takes off on new orders, but efficiency gains unlikely soon

Shares of InterGlobe Aviation Ltd rose after the company made a large aircraft order. Later, the stock pared gains but it has still gained about 3% in the last two days.

InterGlobe Aviation, which runs IndiGo, placed the order for an additional 300 planes of the Airbus Neo family. Some of these are long-range planes with high fuel efficiency. The order will add substantial seat capacity to its existing fleet of about 245 planes.

However, going by the order backlog with the manufacturer, the order could take about five to six years to get executed. That would mean some of the gains that could accrue from the new efficient planes would take a long time.