IndiGo Reaches Record Deal With Airbus at Start of Paris Air Show

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Facts

  • As the Paris Air Show kicked off Monday, Airbus announced an agreement with Indian airline IndiGo, which will see them sell 500 aircrafts — the largest number ever in a single deal — in a multibillion-dollar agreement for the single-aisle airplanes.1
  • The deal surpasses Air India's purchase of 470 aircrafts from Airbus and Boeing in a deal made earlier this year, illustrating India’s emergence as one of the world’s top buyers in the aviation market.2
  • IndiGo CEO Pieter Elbers has said the deal “is just the beginning” of India’s growth in the aviation market, as the world’s most populous country fights to meet rapidly growing demands in travel that have shattered records and caused manufacturers trouble in meeting output goals.3
  • It is hoped the A320neo-family jets — set to be delivered between 2030 and 2035 — will help meet demand issues, though some analysts have warned that airlines are over-ordering in pursuit of the same customers. India has the world's largest order book, which accounts for 6% of industry backlog.4
  • On Tuesday, Tata-owned Air India officially inked a separate 470-plane deal, consisting of 250 Airbus aircrafts, 220 Boeing jets, worth $70B.5
  • The Paris Air Show is the largest event of its kind and hosting is alternated with the UK location of Farnborough. This year’s is Le Bourget’s first since 2019, after the 2021 edition was canceled due to COVID-19.1

Sources: 1Al Jazeera, 2Associated Press, 3CNBC, 4Reuters, and 5Mint.

Narratives

  • Narrative A, as provided by Simple Flying. India is already one of the globe’s largest aviation markets and is still growing rapidly. The country’s post-pandemic growth has been exponential and, not only has its population become the largest worldwide, but its economy is seeing the rise of a robust middle class that can sustain industry expansion, such as in aviation. While it may take some time, India is on its way to being one of the largest players in the global aviation market.
  • Narrative B, as provided by The Financial Express. While New Delhi's aviation market is experiencing a boom, there are a number of challenges facing the nation’s airlines and economy that may still limit growth. India is currently experiencing the world’s largest demand for aircrafts because it has the largest global population, but some Indian airlines are still going out of business. Supply chain issues have been brutal, and India's per capita penetration is far lower than other countries. While the raw totals look good, the nation still has a lot of ground to make up for to sustain a healthy aviation industry.

Predictions