Airbus has finalised a record $26.6bn (£17bn) deal to sell 250 A320neo planes to an Indian budget airline in a boost for engineers working for the European aerospace group in the UK.
The deal with no-frills carrier IndiGo, which confirms an earlier provisional order for the planes, is the single-largest order for Airbus.
The wings for Airbus’s A320 planes will be made at Broughton in north Wales, before being sent on to aircraft production lines in Hamburg, Toulouse or China.
The company employs 16,000 people in the UK and produces 1,000 aircraft wings a year at the Broughton plant. The aerospace industry is worth about £24bn a year to the UK economy and it is seen by the government – along with the automotive sector – as a poster child for British manufacturing.
However, Airbus has warned recently that a British exit from the EU could threaten the presence of the Franco-German group in the UK. Speaking in May, the UK head of Airbus, Paul Kahn, said: “If, after an exit from the European Union, economic conditions in Britain were less favourable for business than in other parts of Europe, or beyond, would Airbus reconsider future investment in the UK? Yes, absolutely.”
The latest deal extends the lead of Airbus in the most lucrative market in commercial aerospace, for narrow-body planes, where it is pitched against US rival Boeing. The A320 family of planes, which includes the A320neo, the latest, most fuel-efficient model, are the most popular single-aisle aircraft in the world, with more than 11,800 orders to date and 6,600 aircraft delivered to 400 different airlines.
The plane competes against Boeing’s 737 and upgraded 737Max.
The US company has had 2,831 orders for is 737 Max plane, while Airbus has received more than 4,100 orders for the A320neo, including the latest IndiGo deal.
“It fills us with pride that IndiGo, India’s largest airline and one of the early launch customers for the A320neo, is coming back for more of our benchmark aircraft,” said John Leahy, Airbus’s chief operating officer.
IndiGo is India’s largest airline by market share and was founded in 2006 by entrepreneur Rahul Bhatia and former US Airways chief executive Rakesh Gangwal. The airline is growing rapidly on the back of demand for air travel in India, as millions take to the skies for the first time.
India’s air travel market is forecast by the International Air Transport Association to become the third largest in the world by 2031, as well-established air travel markets in the US and Europe give way to the Middle East and Asia. Manufacturing plans at Airbus have reflected that shift in demand, with Airbus signing a deal for its second factory in China last month. It already operates an A320 assembly line in the city of Tianjin.
IndiGo’s A320neo planes will take off from 2018, with Airbus expected to deliver the planes between 2018-2026. The deal makes IndiGo the largest customer for the A320 family of aircraft.
