Airbus SE has received a major order of 255 jets at the Dubai Air show. This order is expected to bolster the planemaker from Europe, who is expected to lead the aircraft demand after the aviation industry’s lows during the covid-19 pandemic.
The deal is for $30 billion of the A321 model and will be distributed among the low-cost carriers such as Frontier Holdings Inc., Wizz Air Holdings Plc, and two more carriers with Indigo Partners LLC as their main shareholder, as per a testament from the company on Sunday.
Airbus is persuading the suppliers to prepare for an acceleration of narrow-body aircraft’s production to pre-pandemic levels over the next few years. Airbus has trailed rivals Boeing Co. by two-thirds in terms of orders. According to the CEO of Airbus SE, Guillaume Faury, the Indigo deal is part of the planned ramp-up of orders during a signing ceremony in Dubai. He said, “it is a pleasure to be on the front foot and look into the future.”
Airbus is negotiating with Air Lease Corp. for a major order that will consist of both wide and narrow bodies, as per Bloomberg news earlier.
Airbus’s mission in Dubai was to demonstrate a sustained demand for aircraft with little change in the 20-year outlook before the pandemic. Airbus is counting on cleaner jets to drive earlier replacement of fossil fuel-driven aircraft at present than what was forecasted before 2019. Most aircraft ordered by indigo will be manufactured in Mobile, Alabama.
Christian Scherer, the sales chief of Airbus, says that he needs more aircraft and expects a faster ramp-up than the present target of 65 units of A320 series aircraft by the summer of 2023. The slow pace is due to constraints on the suppliers’ deliveries.
Indigo, led by Frankie, who is present in Dubai, has felt optimistic about the market and wants to be early in the buying process; Indigo has taken up certain order lots after other customers canceled their orders. The bulk of the airbus deliveries will take place from 2025 onwards.
Wizz Air is a low-cost airline in Europe targeting market expansion after a rebound in the travel sector after the pandemic. According to Airbus, it is expected to have the biggest t share of 102 aircraft from the 255 ordered, and this includes 27, which are of the longest range of XLR models.
Bloomberg had reported earlier in September that Airbus was looking for order commitment in that range.
Wizz Air, which is based out of Budapest, is expanding in central Europe, with the addition of its flights to places in Austria, Italy, and the U.K. as weaker competitors have backed out of this industry. It has also started a venture in Abu Dhabi during the pandemic and expects to grow in this location.
Wizz Air needs more aircraft in the short term, and it is also looking at extending the leasing tenor of existing aircraft by several years to bridge the gap as per its CEO Jozsef Varadi.
According to Vardi, he is confident in managing the fleets in the short and long terms. Wizz Air will be able to reach Abud Dhabi or Dubai from London in the second half of 2023 after the deliveries of XLR.
Frontier Holdings is planning to take 91 jets between 2023 and 2029. Its fleet will reach 272 aircraft with this addition, including already ordered ones. The airline based out of Denver had an IPO during the pandemic. According to its CEO Barry Biffle, it has faced difficulties from competitors. Still, it has enough pilots to operate the new aircraft.
JetSmart Airlines SpA of Chile and Volaris Aviation of Mexico have ordered 23 and 39 aircraft, respectively. In all, Indigo Partners airlines have ordered 1145 units of 320 aircraft.
