PARIS, June 19 (Reuters) – Europe’s Airbus ( AIR.PA ) announced its biggest aircraft deal in history on the opening day of the Paris Airshow on Monday, with an order for 500 narrow-body planes from Indian budget carrier IndiGo ( INGL.NS ).
The multibillion-dollar deal is the largest ever by aircraft count and eclipses Air India̵[ads1]7;s tentative purchase of 470 jets earlier this year, as India’s two largest airlines plan a surge in regional travel demand.
The deal follows months of negotiations first reported by Reuters.
“This is just the beginning, there is more to come. With the growth of India (and) the growth of the Indian aviation market … this is the right time for us to place this order,” IndiGo CEO Pieter Elbers told a news conference.
The aircraft is to be delivered between 2030 and 2035.
Indian airlines’ efforts to keep pace with the world’s fastest-growing aviation market, which serves the largest population, has seen industry records fall even as manufacturers struggle to meet production targets.
Indian airlines now have the second-largest order book, accounting for over 6% of the industry’s backlog, behind only the US, according to a June 1 report from Barclays.
But some analysts have expressed concern that airlines may overbook jets in pursuit of the same passengers.
After signing the IndiGo deal, Airbus CEO Guillaume Faury said it was too early to start thinking about production rates for the narrow-body jet higher than the planned 75 per month.
IndiGo, which accounts for nearly 60% of the Indian domestic market, was widely expected to retain Airbus as its jet supplier straight away to squeeze out further economies of scale.
It continues to hold separate talks with Airbus and rival Boeing ( BA.N ) for 25 widebody planes, which could be either Airbus A330neos or Boeing 787 jets, sources have said.
Reporting by Tim Hepher and Joanna Plucinska Additional reporting by Aditi Shah Editing by Mark Potter
Our standards: Thomson Reuters Trust Principles.