TeaThe Paris Air Show, one of the biggest events of the global aviation industry, returned after a gap of four years. Industry experts and analysts were expecting aircraft and engine deals in view of the revival of the air travel industry after the COVID-19 pandemic. They didn’t disappoint, thanks to two of India’s leading airlines – Indigo and Air India.
about 80% new aircraft Order Two were delivered by Indian airlines, contributing to a near record level of orders for the show.
Major European aircraft maker Airbus and US-headquartered Boeing jointly announced orders for more than 1,200 aircraft, of which around 1,000 orders were for Indian airlines, according to an analysis by consultancy IBA.
And that is why aviation deals are ThePrint’s news maker of the week.
putting on a show
IndiGo took the lead on 19 June by placing a historic order for 500 aircraft with Airbus, overtaking Air India’s announcement in February to buy 470 new aircraft, the purchase agreement it signed at the show.
In addition to its existing order of 72 aircraft, India’s youngest airline, Akasa Air also revealed plans to add four more Boeing 737 Max aircraft as part of its expansion strategy. The airline said it is on track to “finalize another significant three-figure aircraft order”, which it will announce before the end of 2023.
With its order for 500 aircraft – which includes the A320 and A321 – Indian low-cost carrier IndiGo now has an order book of around 1,000 aircraft to be delivered over the next decade. Currently, the company operates a fleet of over 300 aircraft, and previously placed orders for an additional 480 aircraft.
While IndiGo did not disclose the size of the deal, it is estimated by the industry to be around $50 billion at list price, lower than the $70 billion valuation of the Air India deal. However, the actual cost for these airlines is expected to be significantly lower, as bulk orders often receive significant discounts.
IndiGo CEO Peter Albers emphasized the importance of this historic order for 500 Airbus A320 family aircraft. “This order strongly reaffirms IndiGo’s belief in India’s growth,” he said, adding that the company expects to add 100 million customers this year.
Meanwhile, after the February announcement, Air India’s CEO had insisted that the aircraft order was really about “recognizing the opportunity for Indian aviation” and placing the investment “for the benefit of India”. .
Read also: Nationalization didn’t kill Air India, politics did. Tata’s challenge goes beyond getting it right
Heading towards monopoly?
The deals signed at the Paris Air Show reflect the optimistic outlook for India’s aviation market. But there is also an underlying concern.
India’s aviation industry has experienced contrasting developments in recent months. While domestic airlines registered a surge in demand and passenger growth – 132.14 lakh passengers in May, up from 114.67 lakh in April – flagship airline GoFirst filed for bankruptcy and SpiceJet grappled with mounting losses and grounded airplanes. Has been Moreover, the unprecedented hike in air fares in the recent weeks has added to the woes of the customers.
In such a scenario, massive orders by IndiGo and Air India, which already dominate the Indian aviation market, indicate a possible monopoly in the sector. IndiGo’s market share reached an all-time high of 61.4% in May, with the Air India group coming second with 26.3% through its airlines including Air India, Vistara, according to the latest data released by aviation regulator DGCA. Air Asia India. Akasa Air’s market share was 4.8% during the same month, while SpiceJet’s was 5.4%.
While concerns have been raised about potential “overordering” by airlines to address supply chain issues and secure their positions in the delivery queue, proponents argue that the Indian aviation industry needs additional aircraft To cater to the increasing number of passengers.
India is currently estimated It will be the fastest growing aviation market globally, and is expected to carry 450 million passengers from over 200 airports by 2030, representing a 300% increase from the current 145 million passengers.
Thoughts are personal.
(Edited by Prashant)