APEX Insight: US Investment firm Indigo Partners has placed a record-breaking order for 430 Airbus A320neo family aircraft, worth up to $49.5 billion at list prices. Boeing responded by announcing that flydubai had placed an order for 175 737 MAXs, plus options for a further 50 aircraft, in a deal that could be worth up to $27 billion.
Airbus has secured what is believed to be the biggest-ever aircraft deal in history, after US investment group Indigo Partners placed an order for 430 narrow-body jets consisting of 273 A320neos and 157 A321neos, worth up to $49.5 billion at list prices. The tentative deal was signed Wednesday on the penultimate day of the 2017 Dubai Airshow and more than doubles Airbus’ existing 2017 order book, which has lagged Boeing in aircraft sales this year.
However, Boeing responded by announcing that flydubai had placed an order for 175 737 MAXs, plus options for a further 50 aircraft, in a deal that could be worth up to $27 billion at list prices. Boeing described the agreement as the “largest-ever single-aisle jet order — by number of aeroplanes and total value — from a Middle East carrier.”
“To be successful [with an ultra-low cost model] you have to have a plane that can be worked hard. Airbus fits the bill.” – Bill Franke, Indigo Partners
Indigo said it plans to supply the narrow-body jets to four low-cost carriers, which it has stakes in: US carrier Frontier Airlines, Chile’s JetSmart, Mexico’s Volaris and Hungary’s Wizz Air. Indigo’s managing partner, Bill Franke, who flew to Dubai for the signing ceremony, said, “To be successful [with an ultra-low cost model] you have to have a plane that can be worked hard. Airbus fits the bill.”
Wizz Air CEO Jozsef Varadi said his airline would use around 70% of the 72 A320neos and 74 A321neos allocated by Indigo for expansion in central and eastern Europe. “The next-step technology aircraft will enable us to continue to lower our operating costs as we drive towards our goal of Wizz Air being the lowest fare and lowest unit cost airline in Europe,” he said.
The surprise announcement came after Airbus failed to secure a widely-expected $15-billion deal on Sunday to sell 36 A380s to Emirates. The state-owned Gulf carrier, instead, announced it was ordering 40 Boeing 787-10 Dreamliners. According to the Financial Times, Emirates chairman Sheikh Ahmed bin Saeed Al Maktoum called off the Airbus A380 deal just minutes before it was scheduled to be announced.
“Regretfully, Indigo will not be paying $49.5 billion.” – John Leahy, Airbus
Neither the Airbus or Boeing order is firm, but both manufacturers said they expect to sign final contracts in the coming weeks and months. Despite the Airbus deal’s record-breaking headline price, Indigo is likely to receive a substantial discount. “Regretfully, Indigo will not be paying $49.5 billion,” said Airbus sale chief John Leahy when asked about the final sum.