New Delhi, 19 June 2023: At a joint press conference with Airbus, IndiGo announced today that it has placed a firm order for 500 A320 family aircraft. In terms of volume, this is the largest order for commercial aircraft ever placed in global aviation. The order is exactly in line with that projected in CAPA India’s executive briefing back in Feb-23.
Coming as it does just four months after Air India set the previous record, with an order for 470 aircraft, it has clearly cemented India’s position as the next growth engine of global aviation. Between these orders and IndIGo’s existing backlog, these two carriers alone have over 1450 aircraft on order, cementing the growing optimism about the Indian market.
There are good reasons for the positive outlook. Because as of today, the market remains highly under-penetrated. The total commercial Indian fleet of fewer than 700 aircraft is smaller than some of the world’s largest individual airlines.
Meanwhile, traffic recovery In India post-COVID has been amongst the strongest in the world; the airline market is now 100% privately-operated following the divestment of Air India; the development of airport infrastructure is continuing and apace; and economic regulation is maturing. India has long shown promise, but has struggled to realise its potential. It may finally be set to take its place as the global aviation market of the 21st century.
The aircraft order book for Indian carriers now stands at around 1520 (excluding for now the SpiceJet and Go First orders, which are assumed to be in suspense).
Estimated active order book of Indian carriers
(GoFirst and SpiceJet orders are for now assumed to be in suspense)
| Fleet as at 31-Mar-23 | Widebody Orders | Narrowbody Orders | Turboprop Orders | Total Orders | |
| Air India | 142 | 70 | 400 | 0 | 470 |
| IndiGo | 311 | 0 | 977 | 11 | 988 |
| Akasa | 19 | 0 | 52 | 0 | 52 |
| Vistara | 53 | 3 | 7 | 0 | 10 |
| SpiceJet | 72 | 0 | * | * | * |
| Go First | 59 | 0 | * | 0 | * |
| AirAsia India | 28 | 0 | 0 | 0 | 0 |
| Total | 684 | 73 | 1436 | 11 | 1520 |
Source: CAPA India research and analysis; Airbus, Boeing, DGCA
*SpiceJet and Go First orders assumed to be in suspense for now
The number of aircraft on order is now more than double the fleet count as at 31-Mar-2023, the highest ratio of aircraft on-order to aircraft in-service of any major market in the world. And there will be more to come. Akasa is reportedly expected to place an order in the coming months for 200 aircraft, or possibly higher.
With around half of Air India’s order expected to be consumed by replacement of existing aircraft, the carrier will need to start preparing for its growth requirements beyond 2030. As a result, a further significant order could be expected from Air India in around FY2026. And while IndiGo may have its fleet plan in place till 2035, it too will likely need to place another mega-order within the next five years or so. Should Go First and SpiceJet be successful in achieving financial stability, their existing orders (and possibly new ones) will also need to be considered.
Given the immense potential that exists, these current and expected orders are not unreasonable. And in time to come, we expect to see an increasing and much-needed focus on widebody equipment. The market has the potential to support rapid demand growth on short, medium and long haul routes for decades to come.
The fact that India now has two well-capitalised carriers that have the ability and willingness to take significant bets on the potential of this market, augurs well for the stable, long-term growth of Indian aviation.
Managing growth at this rate will come with its own challenges, for individual airlines, for the ecosystem and for the government. But the orders placed by Indian carriers in 2023 have certainly drawn the world’s attention to what is happening in Indian aviation. And we have as yet barely scratched the surface of what is possible.