IndiGo is preparing for another 'large' Airbus order

NEW DELHI: Indigo Is In Conversation With Airbus SE For A New Order Of A Large Aircraft In A Plate. Asia's Largest Budget Company Has No Intention Of Releasing A Lightning-fast Pace Of Expansion.

The Indian Airline, Which Adds Aircraft To Its Fleet Every Week, Is In Discussions To Buy A Longer-range Version Of The European Planemaker's Newest Narrow-body Jet, According To Chief Executive Officer Ronojoy Dutta.

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Existing Orders Will See Indigo Through The Next Two Years, Dutta Said In An Interview With Bloomberg News Editor-in-chief John Micklethwait. After That, The Carrier Is Considering Adding New Planes Including Airbus's Long-distance A321neo LR And The Yet-to-be-released A321 XLR, He Said.

" When We Order, We'll Order In Bulk For Sure," Dutta Said In New Delhi In His First Interview Since Becoming CEO Of The Airline In January. “I Can't Give You A Tentative Number, But It Will Be Large. We Need A Longer Range."

Great Buy

Though Dutta Did Not Specify The Size Of Indigo's Next Purchase, It's Likely To Be A Multi-billion Dollar Order Based On The Company's History. Its Smallest Order Was So Far For 100 A320 Jets In 2005 Worth $ 6 Billion At List Prices At The Time. Given That The Most Basic Variant Of The A320neo Family Today Carry Sticker Prices Or More Than $ 100 Million Each, A Large Order Could Exceed $ 10 Billion.

Operated By InterGlobe Aviation Ltd, Indigo Is One Of The Few Indian Carriers With Enough Cash To Aggressively Expand, And It's Leg Mapping Out A Way To Build A Long-haul, Low Cost Business To Take Passengers From Places Like New Delhi To London. The Carrier Has Managed To Consistently Make Money As Well As Domestic Rivals Struggle Under A Fierce Fares War And The World's Priciest Jet Fuel - Partly Because It Commits To Large Plane Orders To Cap Costs.

Founded In 2005 By Former US Airways CEO Rakesh Gangwal And Former Travel Agent Rahul Bhatia, Indigo Has Quickly Outpaced All Its Rivals To Grab Almost Half Of The Local Market, Making Both Billioners. At More Than $ 8.6 Billion, The Market Value Of Indigo's Parent Is Almost Double Air France-KLMs And Ahead Of Singapore Airlines Ltd., Dutta Is Not Satisfied.

" There Are A Lot Of Airlines Ahead Of Us," He Said." We Would Like To Be One Of The Biggest, Largest, Profitable Airlines In The World."

Dutta Was Previously President Of United Airlines, Where He Worked For Nearly 20 Years. A Harvard Graduate, Dutta Was Also President Of Indian Budget Carrier Air Sahara For Two Years Before Being Sold To Jet Airways.

Indigo Shares Rose As Much As 1.7 Per Cent, Before Mating All Gains To Trade 0.2 Per Cent Down At Rs 1,558 At 10:48 Am On Tuesday In Mumbai. They Have Gained Around 33 Per Cent In The Past 12 Months.

Top Customer

Indigo Has Specialized In Buying In Bulk, Ordering 430 Jets In The A320neo Family On Top Of An Initial Contract For 100 Older A320 Models. That's Indigo One Of The Biggest Buyers Or Airbus's Best-selling Plane. Such Large-scale Orders Help Airlines Negotiate Discounts And Better Maintenance Terms.

" One Of The Things That Is Key To Our Success Is Keeping The Fleet Cost Down, And Fleet Cost Is Only Down When You Order In Bulk," Dutta Said.

While Indigo Has So Far Confined Orders To Airbus, It Has Not Ruled Out Buying Boeing Co Jets In The Future, According To Dutta. And The Order Being Discussed With Airbus Has Not Been Finalized.

Indigo Is Also Playing Rivals Off Each Other When It Comes To Engines. It's In Talks With CFM International, A Joint Venture Between General Electric Co. And France's Safran SA, In Addition To Current Supplier Pratt & Whitney For A New Turbine Order, According To The CEO.

Indigo Opted For Pratt & Whitney-powered Engines For The First 150 Of Its A320neos Jets, And Like Other Carriers Has Faced Issues Including A Faulty Seal That Stops A Three-month Delivery. The Problems Are Easing, And Pratt Has Stepped Up Spare Engine Supplies To Keep Planes Flying, He Said.

" We Are Negotiating Right Now For An Engine Order," Dutta Said. “We Are Negotiating With Everybody. We Don't Have A Fixed Agenda. We'll Go This Way Or That Way, Whatever Makes Sense."