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Airbus and IndiGo in talks for $20.6 billion jet order

Indian low-cost airlne IndiGo may be on the verge of soothing some of Airbus's anxieties about an inflated euro exchange rate with a massive order for new planes.Indian low-cost airlne IndiGo may be on the verge of soothing some of Airbus's anxieties about an inflated euro exchange rate with a massive order for new planes.
Indian low-cost airlne IndiGo may be on the verge of soothing some of Airbus's anxieties about an inflated euro exchange rate with a massive order for new planes.Namas Bhojani/Bloomberg--Getty

IndiGo, India’s largest domestic airline, is in talks with Airbus (AIR) to expand its fleet with $20.6 billion worth of new jets.

InidiGo is considering an order of 200 additional A320neo planes, which would more than treble the airline’s current all-Airbus collection of 78 aircraft.

The order could provide a huge boost for the European champion, bumping up total orders this year by over a third. To date this year, Airbus has 515 jetliner orders, coming in behind Boeing’s 553, according the the companies’ estimates.

If confirmed, the order would be a consolation after the loss of  about $16 billion worth of orders to its U.S. competitor when Emirates Airline opted for Boeing’s 777X jets over Airbus A350 models. The A320neo has a list price of around $100 million, giving the order a potential total value above the Emirates deal.

As so often in the past, the company is unhappy with the strength of the euro’s stubbornly high exchange rate against the dollar, which puts it at a disadvantage to its U.S. rival Boeing (BA).

Chief executive Fabrice Bregier at the weekend lashed out at the European Central Bank for not doing more to rein in the euro’s “crazy” strength and failing to use the currency as “a weapon…a key asset to promote its economy,” according to the Financial Times.

The Indian company had also talked with Boeing but opted to stay with the French-based company, according to Bloomberg News reports.

 

The purchase could be confirmed at next week’s Farnborough International Airshow in England, two people told Bloomberg. Farnborough is traditionally host to a flurry of such signings.

Airbus currently has a backlog of 186 undelivered planes from its A320 family, and any IndiGo order would add to that list. The single-aisle A320neo, which was premiered in 2010, has become the fastest-selling jet in history.