IndiGo's Record Plane Orders Total $40B

Tuesday, 21st October 2014 at 08:30am

No other Indian airline is as daring and as aggressive and, not to mention, as successful as IndiGo.

Since it was founded in 2006 and began operations in the same year, IndiGo has never recorded a loss during its 8-year history as a commercial airline. In the contrary, it has amassed profits year after year since 2009, the year when it was expected to see if its operations are sustainable.

Most start-up companies use a time-frame to allow their business to reach profitability. In IndiGo's case, they started to become profitable only after three years, which is considered more than remarkable by industry standards, considering the huge initial investment required in an airline business.

While most other Indian carriers are struggling to operate to minimize losses and cut debts, IndiGo operates smoothly amassing profits by the millions of dollars.

What makes IndiGo so different from its rivals? Strategic business decisions.

While rival airlines are trimming down their fleet, IndiGo is doing the opposite by building up its fleet through aircraft acquisitions.

The low-cost airline made headlines four years ago when it placed a firm order with Airbus for 180 A320 aircraft, 150 of which were A320neos. Recently, in mid-October this year, IndiGo made another headlines again when it signed a deal with the same aircraft manufacturing company for an additional order of 250 A320neos valued at $25.7 billion.

The latest order brings the total order by Indigo to 430 planes with Airbus company. The latest order, in turn, has made IndiGo the biggest customer for Airbus planes in history for a single order.

IndiGo is confident wit its future as industry analysts predict that Indian commercial aviation industry will grow at a faster rate than ever before stoking IndiGo's appetite for more planes.

The growing middle-class in India means higher disposable income in a country whose population is already hitting the 1.2 billion mark. It is projected that the country's travel market will grow to 217 million over the next six years with an average growth of 75% per year.

The airline will start taking deliveries for its new orders of A320neos in 2016 while the newest orders for 250 aircraft won't arrive before 2018.

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