New Delhi: Budget carrier IndiGo is in expansion mode, having placed multiple jet orders across different travel classes with French jet maker Airbus. The company placed India’s largest aircraft order of 500 jets last year with a provision to extend the order to 800 jets. The airline is reportedly also planning to order smaller jets for deployment on remote routes under the Indian government’s UDAN scheme.
However, did you know that there was a time when IndiGo founders Rakesh Gangwal and Rohit Bhatia’s ambitious target of placing a 100-jet order was not taken seriously by Airbus?
When Airbus thought IndiGo’s 100-jet order was ‘nonsense’
Former Airbus VP in India Nigel Harwood said that there was a time when “someone ordering 100 planes in India was just nonsense.” Harwood was quoted as saying this in the book Sky High: The Untold Story of IndiGo by Tarun Shukla.
The book quotes Harwood as adding that Bhatia and Gangwal were not taken seriously by Airbus during exploratory discussions for a potential aircraft order since most companies in India stepped back when it came to paying for the jets, and also since IndiGo was a really low-key organisation that lacked the heft of the Tata Group.
To be sure, Airbus was also witnessing a turn in its fortunes as US-based jet maker Boeing’s dominance of the Indian aviation market was also waning.
How much did IndiGo pay Airbus for first 100 jets
While Gangwal and Bhatia had indicated a 40-50 jet order, they were initially thinking of 25-30 jets which may expand to a 100-jet deal, the Business Today reported citing the book. Harwood described Gangwal as a tough negotiator who was aware that a 100-jet order would put IndiGo in a commanding position vis-a-vis the jet maker since it entailed 10 years of business for Airbus.
Bhati, Gangwal and Harwood went to Toulouse, France in 2005 to hash out the details of the deal. eventually, Airbus secured 135 jet orders from India at the 2005 Paris Air Show, according to the book. IndiGo most likely paid $25 million per aircraft compared to $35 million paid to even the most loyal customers, according to the book. For perspective, IndiGo ordered 500 jets from IndiGo in 2023 for $50 billion. Rival Air India, owned by the Tata Group, placed an order worth $70 billion with Airbus and Boeing for a combined 470 jets.
IndiGo airlines has grown from being a low-key entrant in India’s aviation space to placing the world’s largest order for jets. Know what happened when IndiGo ordered its first 100 jets. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
