One in five A320 family planes in Airbus order book is from an Indian carrier

Aircraft orders create opportunities for regional and Indian industry growth, requiring infrastructure development to keep up

As Airbus declared its monthly orders and deliveries data, it got a major boost in June, thanks to Indian carriers that booked one in every five planes.

The data reflects Air India’s order for 140 A320neo aircraft and 70 A321neo planes, which was announced in February and formalised at the Paris Air Show last month. It also included the mega-order from IndiGo for 500 aircraft.

Neither IndiGo nor Airbus had declared the split of aircraft types in their orders, saying they had time to decide the break-up as well as engine selection.

While Air India will start getting the planes as early as this year, IndiGo’s orders are for delivery from 2030 until 2035.

How is the new order split for IndiGo?

IndiGo has split its 500-aircraft order into 375 A321neo planes and 125 A320neo planes. This takes the total number ordered by IndiGo to 765 A321neo planes and 465 A320neo aircraft.

IndiGo has taken delivery of 87 A321neos and 170 A320neos as of now. That leaves 678 A321neo and 295 A320neo planes to be delivered until 2035. The orders are heavily in favour of the A321neo, which seats up to 232 passengers for IndiGo as of now. Additional passengers help the airline reduce the cost per available seat km (CASK).

The IndiGo story

IndiGo is by far the largest customer currently for the Airbus narrowbody aircraft. It accounts for 14.8 percent of the Airbus order book of 5,163 A321neo aircraft and 10.8 percent of the order book of 4,313 A320neo planes at the end of June. Overall, IndiGo has 13 percent of all A320/A321neo aircraft ordered.

IndiGo currently operates 8 percent of the A321neo aircraft and 9.7 percent of all A320neo planes that have been delivered by Airbus.

The Air India story

Air India, which placed orders with both Boeing and Airbus, has 210 A320/A321neo planes on order and 40 A350s, the first of which starts arriving in a few months.

With 140 A320neo aircraft ordered by Air India, 72 by Go First, 295 by IndiGo and seven by Vistara, airlines in India have booked 514 A320neo planes – that’s 20 percent of all undelivered A320neo aircraft.

For the A321neo, there are 70 orders from Air India and 678 from IndiGo, making a total of 748 aircraft, or 18.3 percent of undelivered A321neo planes.

Massive opportunity

The aircraft orders present a massive opportunity for the industry to expand across the region as well as within India as infrastructure needs to keep pace with the induction.

The massive number of aircraft on order also presents an opportunity to the workforce – from pilots to ground services and back office to engineering, not to mention the prospects for allied services, be it catering or retailing at airports.

Traditionally, India’s air traffic has doubled every nine to 10 years. Globally, air traffic increases at twice the GDP growth rate, on average.

As India becomes a larger economy, more airports become operational and purchasing power goes up with a burgeoning middle class, holiday preferences are shifting rapidly, leading to new routes and destinations becoming popular.

Will this opportunity on the passenger front translate into a Final Assembly Line (FAL) in India? Both Airbus and Boeing have shied away from answering this question directly, often referring to the large sourcing and work that goes on in India. Airbus has a FAL in China, while Boeing has restricted itself to the US.

While a FAL might be a far stretch, the sheer volume of planes being added will require good maintenance infrastructure and there will be immense potential for airlines to either insource it or independent units to provide this service. This is also an opportunity like no other for the airport sector.

Large aircraft orders typically are followed by one pessimistic question – where will all these planes be parked? Aircraft are meant to fly and not park, and over the years, Indian carriers have developed their networks to ensure maximum utilisation – a mix of red-eye domestic and international flights.

Changes over time have also done away with the need for nightly maintenance of aircraft.

Orders are only one part of the growth story, the other is people. Starting with pilots, this will be the most difficult part to tackle. Skilled pilots are lured by other carriers in the region that promise a better life with higher and tax-free salaries.