IndiGo Orders 10 More A320Neo Aircraft From Airbus As Part Of 2019 Deal
The board of directors of IndiGo's parent, InterGlobe Aviation Ltd., approved on Monday placing the order of 10 additional A320 Neo aircraft with Airbus.
The order will be part of the original order of 300 aircraft the carrier placed with Airbus in 2019. The additional-aircraft order will be placed by executing the amendment agreement to the purchase agreement, according to an exchange filing.
At a time when airlines are rushing to place orders with aircraft manufacturers, the 10 additional aircraft may be crucial for India's leading airline to cater to a booming aviation market.
While IndiGo placed commercial aviation's largest order on record of 500 aircraft in June, the delivery of those planes will not begin before the end of this decade.
The airline, which celebrated its 17th anniversary last month, is aiming to double in size and scale by the end of the decade. It currently has a fleet of over 310 aircraft and aims to carry 100 million passengers in the current financial year.
The budget carrier is also facing challenges related to engines of these aircraft as close to 40 of its jets are grounded, even as it remains in talks with the engine maker Pratt & Whitney to resolve those issues.
Recently, another two of its Airbus 321s suffered technical glitches with the engines mid-flight. However, both the aircraft landed safely.
In the board meeting, InterGlobe Aviation also approved the setting up of a wholly owned subsidiary with an investment of Rs 30 crore to finance the purchase of aircraft.
The subsidiary is likely to be the company's effort to establish its presence in GIFT City, Gujarat, for financing of aircraft.
While the Rs 30-crore investment will come in one or more tranches, the company will also issue corporate guarantees worth $996 million to secure the payment obligations of the new subsidiary.
Shares of InterGlobe Aviation were trading 1.2% higher at Rs 2,467.8 a piece compared with a 0.3% rise in the benchmark NSE Nifty 50 as of 01.57 p.m.
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