[V.Narayan]

Airbus inching closer to 500 jets order from IndiGo after historic Air India deal

Airbus, according to news reports, has emerged as a front-runner for this order after Air India’s historical provisional purchase of 470 Airbus jets in February this year. This will be one of the biggest aircraft purchase deals in Indian aviation and one of the largest ever in the world.

Aircraft experts told Reuters that the deal could well be worth over $50 billion at the recent Airbus list prices but would be worth less than half this price after factoring in airline industry discounts for bulk deals. IndiGo is one of Airbus’ largest customers and has ordered total 830 Airbus A320-family jets so far, of which nearly 500 are still to be delivered. This proposed order of 500 would be on top of that.

The recent IndiGo order with Airbus comes at a time when India, world’s third largest aviation market, is seeing a strong rebound in travel post-COVID and surging passenger numbers despite high fares.

Makes my heart swell with pride and gives a kick in the pants to all those license raj bureaucrats who kept harping that core industries cannot be left to the private sector. Now the Govt of India should join hands with the private sector airlines to press Boeing/Airbus to set up manufacturing facilities in India and assemble/partly build these machines here. China did exactly this about 15 years ago. By privatizing Air India and getting a albatross off its neck this Govt has demonstrated the will to do stuff that is needed. Now to see if they can get aircraft assembly to India.

[neofromcapone]

Aircraft assembly will come to India
These 1000+ aircrafts cannot be manufactured and delivered in time with the existing factories in Toulouse or Everett or Renton.
We must have a manufacturing and MRO facility in the centre of India.

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Originally Posted by V.Narayan

Makes my heart swell with pride and gives a kick in the pants to all those license raj bureaucrats who kept harping that core industries cannot be left to the private sector.

I will say though that while I don't consider air travel a core sector for the govt to be involved in, I do personally hold the position that there are core sectors that should only be the purview of the govt and not the private sector. Public transport is one (bus and rail networks for eg). Admittedly I'm coloured by the disastrous evidence of privatisation in public transport in the UK and the utter mess that's resulted.

Now the Govt of India should join hands with the private sector airlines to press Boeing/Airbus to set up manufacturing facilities in India and assemble/partly build these machines here. China did exactly this about 15 years ago. By privatizing Air India and getting a albatross off its neck this Govt has demonstrated the will to do stuff that is needed. Now to see if they can get aircraft assembly to India.

How big is the Indian aviation sector vis a vis China? I'm asking because from my understanding the size of the Chinese domestic aviation sector and the prizes to be had was the carrot the Chinese govt waved in combination with their stick to force the hand of Boeing and Airbus. Can the GoI do similar? Is the economic carrot enough to get Boeing and Airbus to dance?

I should add that I fully agree that some kind of manufacturing facility set up by the two majors in India is a must!

[DrPriyankT]

So, it's official. Indigo has officially placed the mega order for 500 more Airbus A320Neo family aircraft. It takes up it's order book to a whopping 1330 planes. Deliveries are spread out till 2035. This means Airbus will be delivering a single customer ie Indigo a whopping 100 planes per year. With Air India's mega order, this adds upto to almost 1800 plus planes to be delivered to India.

Given this huge number, GOI must now flex it's muscles to have Airbus and Boeing set up assembly lines in India.

https://https://simpleflying.com/ind...-airbus-order/

[shancz]

Originally Posted by V.Narayan

Now to see if they can get aircraft assembly to India.

Second your thoughts, unbelievable to even imagine how things were during those times.

An assembly line here would be a leap for us and Airbus giving Boeing a lot to think about their positioning for future orders. The more the merrier holds true.
I am not eligible to comment on their business but looking at the order books and backlog, a new facility should be strongly in consideration.

[dust-n-bones]

What is interesting about the Indigo deal is that all the aircraft are of the single aisle A320 type, to be delivered starting 2030.

It must be a great leap of faith betting so big on technology which is 30+ years old for an economy 7 to 20 years into the future.

And then most of these new aircraft of Indigo and Air India will be operated domestically or near-domestically - given both orders have miniscule wide bodied complements.

So neither is trying to take the business from gulf carriers (which I thought was the prize here), but are instead focused primarily on growing the domestic pie.

Reminds one of the go-go years of Sahara, Jet and Deccan Airways, and the inevitable boom-bust aviation cycle which caught up with them.

Hope the wizkids have thought this 'flood the skies' strategy through.

Originally Posted by shancz

An assembly line here would be a leap for us and Airbus giving Boeing a lot to think about their positioning for future orders.

Agree. If GE is considering making fighter engines for the miniscule, mired in red-tape domestic fighter aircraft market of India, these commercial orders must make the proposition too hard to resist.

[directinjection]

Originally Posted by V.Narayan

[b] While GE-404 engine powers the LCA Tejas Mark I aircraft, the GE-414 engine will power the Mark II Tejas, which will carry a weapon payload of over 6000 kgs and be a replacement for Mirage 2000 and MiG-29 aircraft.

The Mirage 2000 engine M53-P2 develops 95.1 kN thrust with full afterburning while GE-414 which, although a smaller and lighter engine, develops 98 kN which is about the same. Considering that Mirage 2000 has a payload of 5 tonnes, I'm not sure why the payload of Tejas Mk 2 has been fixed at 6.5 tonnes. Isn't that expecting too much from what is essentially a light fighter? Isn't 5 tonnes good enough? Jaguar has a payload of 4.5 tonnes. MiG 27 payload was 3 tonnes and MiG 21 2 tonnes. The substantial redesigning of Mk 2 is bound to make the plane bigger and heavier and F414 might fail to improve the power to weight ratio that its fitment in Tejas was meant to achieve. Tomorrow the Mk 2 would likely be criticised for failing to achieve the intended payload and thrust, just like Mk1 was criticised earlier. Who knows, the air force may then demand fitment of F414 derivatives in Tejas causing further delays! Tejas Mk 2 was thought of in 2008 and we are already in 2023! Isn't it better to underpromise and overdeliver than to overpromise and underdeliver?

[V.Narayan]

Originally Posted by V.Narayan

Airbus inching closer to 500 jets order from IndiGo after historic Air India deal

Looks like it is a done deal now. I simply adore the smell of Indian aviation going places.

https://timesofindia.indiatimes.com/...4.cms?from=mdr
Well done Indigo.

$50 billion is like Rs 4 lakh crores to help sink it in. :-) Indigo are pursuing the right approach of saturating the domestic market which is expected to keep growing in double digits for the forseeable future and with the Udaan plan to implement 300+ airports this is likely to keep growing. Many of the airports presently between position 100 & 200 will in the forthcoming decade become capable of supporting an A320 especially on the links to the metros.

Originally Posted by dust-n-bones

It must be a great leap of faith betting so big on technology which is 30+ years old for an economy 7 to 20 years into the future.

For those rightfully wondering about the longevity of the A320 my response is that as along as some mind-blowing breakthrough in wing design or super light weight materials does not surface the basic design will hold with continuous improvements through the powerplant and avionics.

As I have said before India should now push Airbus to set up a plant in India assembling the A320. India is one of the largest markets for the ATR so ATR too!

Such gigantic orders attract significant discounts which get passed back to the airline via the OEM and Lessor as a mix of management fees (by whatever name called) and lowered rentals. Further, Indigo and other top rated airlines only lease the machine for say 8 years which is about 35% or less of the actual useful life and thus enjoy a healthy terminal value in the lease rental calculations. This is fundamentally where a major part of the differentiating profitability of successful airlines come from.

Now we need a reformed and enlightened regulator run by technocrats and not revolving door IAS officers. India could have become a global leader in shipping but for a blinkered and incompetent regulator and laws.

[dust-n-bones]

Originally Posted by V.Narayan

For those rightfully wondering about the longevity of the A320 my response is that as along as some mind-blowing breakthrough in wing design or super light weight materials does not surface the basic design will hold with continuous improvements through the powerplant and avionics.

Agree on A320. However, should a company not spread its bets when gazing so far into the future? e.g., electric aircraft could do in 10 years what EVs are doing in road transport today.
Then, would you rely on 200 seaters for everything? How about connecting mysore to anantapur as an example, assuming the middle class keeps growing in tier 2/3 towns - which frankly is where the future growth will come from. There, wouldn't 'regional' jets like embraer not be a much better fit?

Similarly, Chinese jets could throw existing cost models out of the window within 5 years, mega deal discounts notwithstanding. Many on this forum have strong things to say about China, but you would be nuts making emotional/patriotic bets with $50B.

Originally Posted by V.Narayan

Now we need a reformed and enlightened regulator run by technocrats and not revolving door IAS officers. India could have become a global leader in shipping but for a blinkered and incompetent regulator and laws.

+1

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Originally Posted by dust-n-bones

Agree on A320. However, should a company not spread its bets when gazing so far into the future? e.g., electric aircraft could do in 10 years what EVs are doing in road transport today.
Then, would you rely on 200 seaters for everything? How about connecting mysore to anantapur as an example, assuming the middle class keeps growing in tier 2/3 towns - which frankly is where the future growth will come from. There, wouldn't 'regional' jets like embraer not be a much better fit?

I suppose one could make that argument about any single design carrier, the likes of your Ryanair, Southwest, Indigo, etc. Take the Max debacle giving a scare to the sole 737 operators or P&W engine troubles affecting sole Airbus fleet operators. I guess that's the gamble you make in terms of a vastly simplified logistics and maintenance headache by having a single design fleet especially for low cost operations.

I can see your point though. It's a reasonable argument to make that given the projected delivery dates for these massive orders, won't these designs be obsolete by then? From what I can tell though, and please V.Narayan & Jeroen et al. feel free to chime in here, the civil aviation sector is very much an incremental industry in terms of changes. It's why development timelines are a decade at the best of times and fundamental airframes can be decades old. Just look at the 737 airframe or even these A320s. Even the A220 took Bombardier well over a decade to make and even then I think the biggest changes in the sector have mostly been in the materials space (increasingly composite construction) but efficiency gains through engine advancements (high bypass turbo fans, composite fan blades, lean burn, geared turbofans, etc). Given the fact the civil aviation sector has probably the highest safety tolerances and regulatory burden (I sometimes wonder if the civil nuclear industry has comparable stringency or not), whatever concepts in terms of alternative powerplants would take multiple decades I reckon to scale up to the point it becomes par for the course for your average flyer. Here to though, there's a known unknown in the fact that yes, you could have a transformative technology just click and come to market rapidly but it's a gamble once more in terms of accounting for that.

Far as I'm aware, the general consensus is that BEV technology doesn't make sense for civil aviation. The ways to decarbonise are through synthetic fuels and at the exotic end, hydrogen (but that's tied to another huge bet in terms of a hydrogen economy which is a whole other kettle of fish).

I think, and this is where those more knowledgeable of how these deals/contracts are structured can detail, is that the way these deals would allow for changes based on market realities down the line. A more general question is historically, how many of these massive deals that are for models with already bloated and delayed order books, end up with the full fulfilment of the original order total X amount of years down the line?

Similarly, Chinese jets could throw existing cost models out of the window within 5 years, mega deal discounts notwithstanding. Many on this forum have strong things to say about China, but you would be nuts making emotional/patriotic bets with $50B.

Given both the Indian carriers in question are private market entities, I think we have to take patriotism out the picture. If they turn out to be a bad $50bn bet, it's a bad bet made by the management. I concede in reality it's never purely a decision ruled by free market factors when it comes to things like these.

I think the threat of a Chinese entry to the global civil aviation market is serious. That being said gaining regulatory approval for them to be able to fly the C919 outside China is going to be an uphill struggle. At least in a pre-MAX scandal world when all regulators still turned to the FAA for leadership, you could say the stumbling block was convincing the FAA and then likely the rest of the dominoes would fall in gaining that approval. Now we very much have a fractured global regulatory landscape in the sense I no longer think the FAA is the first amongst equals anymore. Large regional regulators now will be much more willing and able to proceed independent of each other. Oh and then there's the little old issue of a full on trade war in all but name against the two superpowers so that'll complicate the landing for the C919 on the global market. All that'll do is buy the existing duopoly of Airbus and Boeing time. It seems inevitable with the mountains of money the Chinese have thrown behind COMAC that they'll eventually have respectable commercial airliners. In a way it'll be good because it'll force the duopoly to not be complacent and maybe stimulate some genuine innovation once more, especially at the moribund Boeing group.

https://youtu.be/syp5sk8lrOo?t=1006

The tail end of this video linked above mentions that the Chinese domestic aviation market is expected to be on the order of 8000 new planes! Makes you realise the size of the carrot the CPC used in combination of the stick forcing Airbus and Boeing to open domestic facilities. It also makes you realise that COMAC could do just fine off the back of serving the domestic Chinese market alone. And in terms of Chinese financing blowing the door wide open on the civil aviation sector, I'm not so sure. I know having a home grown civil aviation player comparable to Airbus and Boeing is one of the pride projects of Xi and I reckon that having enough to serve Chinese airlines alone is probably sufficient in reaching that goal. I can't see them offering these with favourable financing to steal deals from the duopoly in say emerging markets though it does seem logical that the first likely export successes for COMAC would come in some friendly African Union, or ASEAN or South American states, in a similar way to how Russian alternatives had some very limited export orders outside the domestic market. This is likely to be the case for at least the next decade I'd wager conservatively.

Coming back to a question I'd asked earlier, it makes you wonder what the projected size of the market is for new planes that'll be ordered by the Indian aviation sector.

https://www.youtube.com/watch?v=6g_Vk2A7AK0

Incidentally I did have a video come up on my feed recently about the C919 and judging from this brief look, it does seem that COMAC has cherry picked from the global parts bin for what works for their narrow body single aisle competitor. Again, makes you wonder just how much of that airframe is at the mercy of sanctions in a trade dispute. And how vulnerable either of Boeing or Airbus is if the civil sector starts getting drawn into the trade war.

Anyway, here's another relevant Sam Tsui video, at least the bits chatting to the Air India CEO. Mr Campbell seems switched on, cognizant of where Air India was in its heyday but none of the usual bombastic claims about getting back there instantly. Instead there's recognition that it'll be a gradual process . Think everyone is in agreement they'd like to see most of these improvements to the entire Air India experience pan out.

https://www.youtube.com/watch?v=T-5ZWKrxB20

However, should a company not spread its bets when gazing so far into the future?

Sorry to belabour the same point again but I can't help but remember something Jeroen pointed out in the thread about Boom Supersonic. Many were bullish on the return of supersonic civil aviation after one of the American carriers inked a deal with the company but it turned out that in reality that deal was very much a hedge. One where if Boom Supersonic did manage to deliver, said American carrier would be advantageously positioned to capitalise. I don't doubt most large carriers have such deals in place on emerging tech, but only insofar as they dip their toe in with room to hastily retreat if needed.

[V.Narayan]

I don't wish to debate endlessly on what to me seem rather theoretical issues divorced from the reality of airline operations but assuming your questions are genuine here are my responses.

Originally Posted by dust-n-bones

However, should a company not spread its bets when gazing so far into the future?

The leases would typically be for 8 years after which the aircraft would return to the Lessor. I would not count 8 years as far into the future.

e.g., electric aircraft could do in 10 years what EVs are doing in road transport today.

If an electric 180-seater airliner that could carry 20 tonnes of payload 4000 kms with reserves enters service in the next 20 years I will change my name. The gap in energy density between aviation fuel and battery or hydrogen combined with the power to weight needed for an aircraft {which is multiples of that needed for a land vehicle} makes this unfeasible with any future technology on the horizon today.

Then, would you rely on 200 seaters for everything?

Yes, absolutely. Ideally yes. You can vary load factors by hopping flights connecting one small town to two bigger ones or fly 3 times a week instead of 6, or code share etc.

How about connecting mysore to anantapur as an example, assuming the middle class keeps growing in tier 2/3 towns - which frankly is where the future growth will come from. There, wouldn't 'regional' jets like embraer not be a much better fit?

Sir we will have to get into the a-b-c of airline operations to explain this which I am not inclined to do. Indigo at least have bet on the ATR 72 for commuter routes. Indigo alone is not obliged to fill every route in the country. Every time you add a new aircraft type to your inventory, cost & organization wise, it is like creating a whole new airline across the board, within your company. That is why low cost carriers try and stay with one type of aircraft. It is cheaper to operate a hopping flight Chennai-Anantpur-Mysore with a 180-seater thrice a week in a single aircraft type airline than to try and add a second aircraft type and fly a Anantpur-Mysore flight, 6 times a week, with a 90-seater Embraer Regional Jet while operating A320s on other sectors.

Similarly, Chinese jets could throw existing cost models out of the window within 5 years, mega deal discounts notwithstanding. Many on this forum have strong things to say about China, but you would be nuts making emotional/patriotic bets with $50B.

Maybe ten years from now an Indian carrier will buy/lease a Chinese jet but most A grade carriers world over will wait at least 5 years to observe the safety record first. For Chinese jets my assessment is that their market for now will be China and poor third world countries to whom it gets to as Chinese aid/grant. The real cost of a jet is not in the initial acquisition but in the operation for 8 to 15 years. How economical a Chinese jet would be over 8 to 15 years only time and real flying operations will tell. Consider why no one other than a couple of Russian satellite States, buys Russian jets even when available for super deep discounts.

[dust-n-bones]

Sir,
I respect your viewpoint, as I'm sure most on this forum do as well. The tech and ops wisdom you describe so well is the 'state-of-the-art' of the west since last 50+ years. Would the model remain iterative 15-20 years into the future as well - when these planes are operationalized?

Originally Posted by V.Narayan

If an electric 180-seater airliner that could carry 20 tonnes of payload 4000 kms with reserves enters service in the next 20 years I will change my name.

What if 30 seater electric planes start flying suburban connections like electronic city to thoraipakkam in chennai, with bus like frequency? How many people then would brave a 6 hour door-to-door trudge for a 200 seater even if the direct suburban is more expensive?

Originally Posted by V.Narayan

Maybe ten years from now an Indian carrier will buy/lease a Chinese jet but most A grade carriers world over will wait at least 5 years to observe the safety record first

Not many people 10 years ago could have predicted that the EV winner would be China. But here we are, in what is another regulated industry.

Being circumspect, like you are, is understandable. My $0.02 is only that a number of yet over the horizon events can bust these very large, very similar, very traditional bets AI and Indigo have made. Its as if they are double counting the same passenger. And we have not even discussed the assumptions these deals make on the global and national economy.

Regardless, I do admire the newly discovered optimism seeping everywhere in the corporate world. As they say, the future's so bright, gotta wear shades .

[itwasntme]

I’m confused by the reporting! Isn’t that firefighting foam / retardant on the runway on which the pilot gently lowered the failed / unlocked nose gear to avoid a fire?

https://www.indiatoday.in/india/stor...284-2023-07-12

[dust-n-bones]

Indigo apparently asked its pilots to use lower flap settings during landings which is not per the Airbus recommendations, in order to save fuel. This could be potentially behind the recent tailstrikes, reports The Hindu.

https://www.thehindu.com/business/In...le67131311.ece

Apologies if this was reported earlier.

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Originally Posted by dust-n-bones

Indigo apparently asked its pilots to use lower flap settings during landings which is not per the Airbus recommendations, in order to save fuel. This could be potentially behind the recent tailstrikes, reports The Hindu.

https://www.thehindu.com/business/In...le67131311.ece

Apologies if this was reported earlier.

Is this not similar to the many tactics enshrined in their own operations and used extensively by Ryanair? I seem to remember reading a whistleblower exposé by disaffected senior pilots who were bemoaning the many non standard methods employed en masse by the infamous low cost carrier in its constant bid to keep their own costs down. But this was years ago so clearly this sort of thing is well known by regulators but below the threshold where the airline gets it's knuckles rapped.