IndiGo Orders 30 A350s: Exploring Financing Options & Future Growth
Apr 30, 2024 19:34
IndiGo CEO Pieter Elbers discusses the airline's ambitious expansion plans with the purchase of 30 A350-900 wide-body planes, focusing on financing options and future growth strategies.
Photograph: Peter Cziborra/Reuters
New Delhi, Apr 30 (PTI) IndiGo will explore different modalities for financing the wide-body A350-900 planes, which will provide a whole range of opportunities, its chief Pieter Elbers said on Tuesday as he emphasised the airline's cost leadership and efforts to expand its presence.
After flying for nearly 18 years, IndiGo, last week, announced an order for 30 A350-900 aircraft and there is also the option to purchase another 70 such aircraft.
During a call to discuss about the wide-body aircraft order, Elbers said the airline will have around 600 narrow-body planes operational by 2030 as it aims to double in size. Currently, the carrier has around 350 narrow-body planes.
While emphasising its cost leadership, the IndiGo CEO said the order for 30 wide-body planes is also a balance of being "impactful enough and (also) prudent enough".
"... exploring the opportunity, we are taking in a number that is meaningful enough to have an impact yet prudent enough not to move into a direction where we may face some headwinds," he said and added that it can also use the learnings from operating narrow-body aircraft.
The airline expects to start taking deliveries of the A350-900 in 2027.
Asserting that the decision to order wide-body planes was not taken overnight, Elbers said the key abilities of this aircraft give it a whole range of opportunities.
"We have a very strong presence in Delhi, Mumbai, Bengaluru, Hyderabad... one could see the network developing with different strongholds... we have gone through the evaluations of different strongholds, getting more and more connectivity," he said.
To a query on financing the wide-body aircraft, Elbers said the airline will explore further and different modalities. "We have a long, successful history of what we have been doing... wide-body planes have a lower tenure than narrow-body planes, we will take all that into consideration when we speak about financing".
The majority of IndiGo's planes have been inducted on sale and leaseback model, and it only has Airbus planes in its narrow-body fleet.
Around 1,000 planes are on order by IndiGo and the first A321 XLR aircraft is expected in 2025.
According to Elbers, there will be synergies around cockpit crew and other factors since both narrow-body and wide-body aircraft are from the same family, Airbus. The synergies can be leveraged to maintain the cost efficiency, he added.
The A350-900 planes will be powered by Rolls Royce's Trent XWB engine and the exact configuration of these aircraft, whose delivery is expected to start from 2027, will be decided later.
The airline aims to double in size by 2030 with new domestic and international routes as well as destinations as the airline pursues soaring global ambitions to match India's economic growth potential.
In June last year, IndiGo placed the largest-ever single aircraft order by any airline for 500 aircraft with Airbus.
The outstanding order book of A320 family aircraft stands at almost 1,000 which are yet to be delivered well into the next decade. The order book comprises a mix of A320 neo, A321 neo and A321 XLR aircraft.
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