IndiGo aims to purchase 500 aircraft from Boeing and Airbus

IndiGo, a low-cost airline, denied having made any decisions as of yet, hours after it was announced that it was in negotiations with aircraft makers to purchase 500 jets. The airline was in discussions to purchase hundreds of passenger jets, according to a Reuters story on Friday.

The biggest domestic player in the nation claimed that as it plans its next stage of growth, it is always in communication with the manufacturers. But, the airline stated, “Up to this point, we haven’t finalized anything.” The airline went on to say that it doesn’t comment on rumors and will release information as soon as it receives an update.

Why IndiGo aims to purchase 500 more aircraft?

According to the news source, IndiGo was in talks to acquire more than 500 passenger jets from both American aircraft manufacturer Boeing and its present supplier Airbus, potentially breaking an industrial record set by Air India a couple of weeks ago. On February 14, Air India placed an order for 470 aircraft with Boeing and Airbus, making it the first company to do so. The airline is purchasing 220 Boeing jets and 250 Airbus jets.

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According to Reuters, IndiGo has previously been Airbus’ sole customer for narrow-body aircraft, and French Finance Minister Bruno Le Maire claimed last month that IndiGo was on the verge of placing large orders with the European aircraft manufacturer for hundreds of aircraft. Nevertheless, negotiations to continue replacing IndiGo’s fleet starting at the end of the decade have expanded to include mid-sized wide-body aircraft, sources told Reuters, setting off a competition between Boeing’s 787 Dreamliner and the updated Airbus A330neo.

As it considers a sizable new order for narrow-body aircraft, the budget airline is also contrasting the A320neo with the Boeing 737 MAX, according to the sources. In order to further leverage economies of scale, it is widely anticipated that IndiGo will keep Airbus as its supplier of narrow-body aircraft. The airline, which is among Airbus’s biggest clients, has so far placed orders for a total of 830 Airbus A320-family aircraft, of which 488 have not yet been delivered.

Air India is anticipated to pose a significant threat to IndiGo, which now dominates the domestic market, as it seeks to grow by adding more aircraft to the skies. Air India stated in September of last year that it would aim to raise its market share in the domestic market to at least 30% over the following five years. 

With a current market share of 55%, IndiGo is the dominant domestic airline, followed by Air India in third place with a stake of around 10%.