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Wednesday, 15 November 2017

Airbus Updates No.1703

Dubai Air Show: Airbus Secures Record-Breaking $50 billion A320neo Deal with Indigo Partners

Dubai Air Show: Airbus Secures Record-Breaking $50 billion A320neo Deal with Indigo Partners
November 15
06:082017
DUBAI — After complete dominance from Boeing at the Dubai Air Show, and an order from Bombardier for its CSeries program, Airbus finally broke through with a record-breaking order for its A320neo Family Program.
Airbus and Indigo Partners, owner of low-cost carriers Wizz Air, Volaris, Frontier, and JetSMART have signed a deal for 430 additional A320neo aircraft, valued at $49.5 billion.
The commitment breakdown features 273 A320neos and 157 A321neo aircraft.
Airlines within the Indigo Partners conglomerate, have previously ordered 427 of the A320 family, which shows a doubled increase in their commitment to the program.
“This significant commitment for 430 additional aircraft underscores our optimistic view of the growth potential of our family of low-cost airlines, as well as our confidence in the A320neo Family as a platform for that growth,” said Bill Franke, co-founder, Managing Partner of Indigo Partners, and Chairman of Frontier Airlines
“Our airlines know that a great aircraft coupled with a great business plan will create value for our customers. We look forward to bringing comfort and low fares to more passengers around the world as Wizz Air, Volaris, JetSMART and Frontier continue to expand,” he added.
John Leahy, Airbus CCO, said added that “Indigo Partners has been a tremendous customer and supporter of the Airbus single-aisle fleet for many years. An order for 430 aircraft is remarkable, but it’s particularly gratifying to all of us at Airbus when it comes from a group of airline professionals who know our products, as well as the folks at Indigo Partners, do. “
Leahy admitted that Airbus is “proud to augment [Indigo Partners’] fleets in Latin America, North America, and Europe with the single-aisle aircraft that offers the lowest operating costs, longest range and most spacious cabin: the A320neo Family.”

THE ORDER BREAKDOWN


In terms of the aircraft split in the order; it goes as follows:
  • Wizz: 72 A320neos, 74 A321neos
  • Frontier: 100 A320neos, 34 A321neos
  • JetSMART: 56 A320neos, 14 A321neos
  • Volaris: 46 A320neos, 34 A321neos
Bill Franke of Indigo Partners noted that in terms of engine manufacturers, they will be announced at a later date following consultation with such companies. Indigo Partners will benefit from this order as the aircraft types aim to save fuel costs by 20% by 2020.

COMPETITION FOR THE 737MAX? WHAT ABOUT THE A380 PROGRAM?


This could ultimately be seen as a massive attack on the Boeing 737 MAX Program on a marketing perspective, as a conglomerate of four airlines has doubled their commitment to an Airbus, which shows extra confidence in the neo product.
The 737 MAX has not had a deal to this size yet, although they are getting closer, especially with the likes of FlyDubai responding today with a 225 737MAX order for Boeing.
It also shows that the intensity in the single-aisle market is heating up, with carriers acknowledging that the best way forward to their operations on an efficient, cost-effective and easier basis is by either buying the A320neo family or the 737MAX.
This added confidence in the single-aisle aircraft market does not do any favors for the A380 program either. All the commitments seen to date at the Dubai Air Show highlights that there is starting to be no interest in the superjumbo program anymore, which could hint to Airbus that it may be time to either start slowing the program down even further or bringing it to a conclusion.
All-in-all, this order is a massive gamechanger for Airbus as it maintains their footing in the single-aisle market and implements additional pressure onto Boeing with their 737MAX variants not selling as many units on a bulk basis like Airbus is showing off.

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