IndiGo has received approval from the government to import 400 additional aircraft over the next 10 years. The airline already has in place an approval (granted in May 2010) to import 150 A320 neos till 2025.
If the import approvals are anything to go by, on an average IndiGo will be importing one aircraft every week for the next 10 years making it the fastest and largest fleet expansion programme for any scheduled airline in India’s civil aviation history. The country’s nine scheduled airlines operate between them around 375 aircraft currently.
To put things in perspective, IndiGo itself has inducted on an average one aircraft every month since it started operations on August 4, 2006. At present, it has an operational fleet of 93 aircraft. IndiGo had a lion’s share — 37.1 per cent — of the traffic in the domestic market as of last month.
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A senior official in the ministry of civil aviation said, “IndiGo had applied for permission to import 400 additional aircraft in December last year. The same has been granted to them. They have been given in-principle approval to import these aircraft over the next 10 years till 2025.”
A spokesperson for IndiGo confirmed the development said, “The import approval for 400 aircraft include orders for 250 planes placed in October last year, additional purchase rights for 100 aircraft and 30 optional aircraft purchase rights pending from an earlier order placed in 2011.”
In the largest single order for aircraft maker Airbus, IndiGo in October last year signed an agreement to buy 250 A320neo planes. The companies did not disclose the deal value. Going by the list price, it could be $25.7 billion, though airlines usually get a discount in such deals. The airline had options to exercise additional purchase rights for another 100 aircraft.
IndiGo president Aditya Ghosh had said the deliveries under the new order would begin from 2018 and overlap with those under the 2011 one.
Before this, IndiGo had made two mega orders for Airbus aircraft — for 100 A320s in 2005, and 180 planes (150 A320neos and 30 A320s) in 2011. The 2011 order, though, was later modified to 180 A320neos. Airbus has said the A320neos, with their new engines and enlarged wing-tip devices, will deliver fuel savings of 15 per cent from day one.
In November last year, the country’s only profitable airline had completed induction of 100 planes from its 2005 order (two years ahead of schedule). It had then decided to take 12 planes on lease from Tigerair to stay ahead of competition. The deliveries of A320neo planes under its 2011 order will begin from October 2015. No other Indian airline has such big pending orders. Among peers, GoAir has ordered 72 Airbus A320neos and SpiceJet for 42 Boeing 737 Max.
IndiGo’s massive fleet induction plans come at a time when the market is rife with speculations about a possible initial public offering later this year. According to reports, the airline is looking at raising $ 400-450 million from an IPO, which will be managed by six investments banks. The red herring prospectus for the planned debut on the stock exchange is likely to be filed by May this year.
IndiGo follows a sale-and-leaseback model. While most of its planes are on lease for six years, a few are on financial lease for 10-12 years.
Source:- financialexpress.com
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