Airbus nears 500-jet order from India's IndiGo -sources

© Reuters. FILE PHOTO: An IndiGo Airlines A320 aircraft is parked on the tarmac at Bengaluru International Airport in Bangalore March 7, 2012. REUTERS/Vivek Prakash/File Photo

By Tim Hepher, Aditi Shah and Joanna Plucinska

ISTANBUL (Reuters) - Airbus is closing towards a potentially record deal to sell 500 narrow-body A320-family jets to India's largest carrier IndiGo, industry sources said on Sunday.

The European planemaker has emerged as front-runner for an order eclipsing Air India's historic provisional purchase of 470 jets in February, the sources said on the sidelines of an airline industry meeting in Istanbul.

Such a deal would be worth some $50 billion at the most recently published Airbus list prices, but would typically be worth less than half this after widespread airline industry discounts for bulk deals, according to aircraft analysts.

Airbus and Boeing (NYSE:BA) are also still competing in separate talks to sell 25 A330neo or Boeing 787 wide-body jets to the same airline, the industry sources said.

IndiGo Chief Executive Pieter Elbers, attending the annual meeting of the International Air Transport Association in Istanbul, declined to comment on commercial matters.

Airbus and Boeing also declined to comment.

Reuters first reported in March that IndiGo, which has a 56% share of the domestic Indian market, was in talks with both Airbus and Boeing for the order, which if confirmed would be the largest by a single airline ranked by the number of units.

IndiGo is already one of Airbus's largest customers and has so far ordered a total of 830 Airbus A320-family jets of which nearly 500 are still to be delivered.

Airbus and Boeing have been racking up billions of dollars of new orders stretching beyond 2030 as airlines lock in supplies ahead of looming shortages.

Turkish Airlines had taken the spotlight before the IATA meeting with a surprise announcement that it could order 600 jets, but delegates said there were few signs of an immediate deal.

TRAVEL REBOUND

Indian carriers now have the second-largest order book, with over 6% share of the industry backlog, behind only the United States, according to a June 1 report by Barclays (LON:BARC).

But some analysts have expressed concern that airlines could be over-ordering jets in pursuit of the same passengers.

Lufthansa Group CEO Carsten Spohr told reporters on Sunday there was globally more supply than demand, however.

The drive by IndiGo comes as the world's third-largest aviation market is seeing a strong rebound in travel post-COVID, with passenger numbers surging despite high fares.

IndiGo aims to double its capacity by the end of the decade and expand its network, especially in international markets.

The airline has a codeshare partnership with seven carriers including Turkish Airlines, American Airlines (NASDAQ:AAL) and KLM.

The alliance with Turkish Airlines has seen IndiGo make a major push into Europe, a favourite holiday destination among Indians, with the budget carrier now offering flights to 33 European airports.

In a departure from its single-aisle strategy, IndiGo earlier this year began international operations to Istanbul with a Boeing 777, its first wide-body aircraft, taken from codeshare partner Turkish Airlines, which provides the pilots.

Taking on the two widebodies is a stop-gap arrangement for IndiGo which needs the capacity until it takes delivery of the longer-range Airbus A321XLR planes in 2025-ish timeframe, Elbers told Reuters in an interview in March.