What does IndiGo’s A350 order mean for Airbus?

When VT-JRA, the first A350 for Air India and first in India, touched down at Delhi’s Indira Gandhi International Airport in December 2023, it marked a watershed moment for not just Air India and its fleet renewal plans but also for Airbus. This was the first and only Airbus widebody in India at that time.

Airbus has had a great dominance in the narrowbody market, even after the shut down of Go FIRST, with IndiGo, Air India, Vistara operating the A320 family, while Air India Express being stagnant, SpiceJet under financial issues and Akasa Air too small to help Boeing with the market share, especially after the fall of Jet Airways. However, Boeing had total domination in the widebody segment with all i.e. 100% of widebodies with Indian carriers being Boeing aircraft. The 787s of Air India and Vistara, along with the B777s of Air India comprised the widebody fleet in India.

Airbus made the first breakthrough in February 2023 when Air India signed up for 40 A350s, in addition to 20 Dreamliners and 10 B777X. Airbus had a presence in Indian skies in the form of A330s to both Kingfisher Airlines and Jet Airways. Air India has been an Airbus widebody operator in the past too. Air India moving to Boeing and the fall of Kingfisher Airlines and Jet Airways meant that Airbus did not have a widebody in India, even as it cornered the narrowbody market with incremental record orders from IndiGo.

Beyond the planes

Selling a plane is just one part of the deal for any OEM. The revenue comes from providing technical expertise, maintenance contracts, training and building allied industries. All OEMs offer these services directly or via subsidiaries.

More strength for the A350

The announcement coincided with Airbus committing to higher production rates of A350 from 2028. Both Airbus and Boeing have been looking for a successful low cost long haul. A few have made it but not really a giant success like the legacy carriers of British Airways, Lufthansa or Singapore Airlines.

Airbus has traditionally pitched the A330neo to LCCs with benefits of early availability as compared to the A350 and a smaller size. IndiGo on the other hand has gone for the larger A350 which gives it the flexibility to fly non-stop to the US and Australia – both markets where it has codeshare partners.

A success with IndiGo would open up such large deals for Airbus in the region where VietJet, AirAsia X have invested in widebody operations but are yet to find a firm ground.

At its peak, will Airbus pip Boeing?

Air India and Vistara, currently operate 60 Boeing widebody aircraft comprising the legacy B777S of Air India, 787s of both Air India (-8) and Vistara (-9) and the former Delta and former Etihad B777s. This will be supplemented with six A350-900s, four of which are in India already. The airline has another 36 A350s, while IndiGo will add 30, making it 66 A350s in India. Air India will also add 20 B787-9 Dreamliner and 10 B77X over the next 5-7 years. At some point, the oldest of B777s from the Air India fleet will leave the fleet, which could be another six to eight years from now. This means that from zero widebody aircraft in India to being possibly the leader or neck to neck with Boeing, Airbus would have made a marvellous comeback in Indian skies.

Tail Note

The final frontier for Airbus in India could be the A220s and will IndiGo be the customer for the same? IndiGo has ATRs – a JV of Airbus, the A320 family aircraft comprising the A320, A320neo, A321neo and A321XLR on order and now the A350 widebody on order. The only segment which IndiGo does not have from the Airbus portfolio is the A220 small jets.

For now, Airbus has to work towards getting the deal finalised and getting it ready for a formal signing. IndiGo and Airbus have hurriedly announced that IndiGo has “agreed” for a firm order of 30 A350s. This indicates that the orders won’t be part of the Orders & Deliveries declaration at the end of April. Would Boeing be wondering what went wrong in 2005 that IndiGo signed up with Airbus? Did it have a change in the widebody order or was it always a one horse? Will there be more orders coming from IndiGo? All of this would possibly have to wait till July when the aviation action shifts to Farnborough Air Show.