New Delhi: Civil Aviation Minister Jyotiraditya Scindia said Tuesday that budget airlines IndiGo’s 500-plane order with Airbus had “set another landmark” and would have a multiplier effect in the sector.
The multi-plane deal announced by Europe’s Airbus on the opening day of the Paris Airshow on Monday is the biggest plane deal in history, which eclipsed Air India’s provisional purchase of 470 jets earlier this year – 250 with Airbus and 220 with America’s Boeing.
The country’s two largest carriers are planning for a sharp expansion in regional travel demand.
“Not only for stakeholders in civil aviation sector, but also for the 1.4 billion people in our country who are desirous more and more so to travel by air… this transaction – very close on the heels of the Air India order – has set another landmark with this largest ever reported order by a carrier with any aircraft manufacturer,” Scindia said Tuesday.
He said it was important to understand the multiplier effects of civil aviation and the direct and indirect economic multiplier effects too. “Every dollar invested in civil aviation yields $3.1 in terms of new growth, as well as the employment multiplier. Every direct job in civil aviation results in 6.1 indirect jobs in the sector. And therefore, there are tremendous dividends that accrue from an ever-expanding civil aviation sector,” Scindia added.
He said the airline sector had grown – from a fleet size of 400 in 2014 to 700 in 2023.
“We have witnessed a 75 percent growth to the fleet size… We have witnessed the birth of many countrywide carriers, regional carriers, and also orders placed by India’s foremost carriers which are greater than the size of India’s total fleet in 2013-14,” the minister said.
The 500 narrowbody A320 family aircraft will be delivered between 2030 and 2035.
Indian carriers now have the second-largest order book, with an over 6 percent share of the industry backlog, behind only the United States, according to a 1 June report by Barclays.
But some analysts have expressed concern that airlines could be over-ordering jets in pursuit of the same passengers, Reuters reported.
IndiGo accounts for nearly 60 percent of the domestic market, and continues to hold separate talks with Airbus and rival Boeing for 25 widebody planes, which could either be Airbus A330neos or Boeing 787 jets, sources told Reuters.
Also read: IndiGo places largest order in aviation history — 500 aircraft from Airbus