Indigo partners, a private equity firm that invests in multiple low cost airlines around the world, has signed a letter of intent for 430 Airbus Aircraft at the Dubai Airshow. The 430 narrow body aircraft deal is worth 49.5 billion dollars and will begin arriving to the airlines in 2025.

Airbus Chief Operating Officer, John Leahy said “Indigo Partners have been a tremendous customer and supporter of the Airbus single-aisle fleet for many years.”

The order, which is the largest aircraft order of all time, will be split between four low cost airlines including American carrier Frontier Airlines, Mexican carrier Volaris, European carrier Wizz Air, and Chilean airline JetSmart, which recently launched flights this past July. This order will exponentially increase the number of aircraft in each airline’s fleet.

Bill Franke, a managing partner at Indigo Partners said “This significant commitment for 430 additional aircraft underscores our optimistic view of the growth potential of our family of low-cost airlines, as well as our confidence in the A320neo Family as a platform for that growth.” He added “Our airlines know that a great aircraft coupled with a great business plan will create value for our customers. We look forward to bringing comfort and low fares to more passengers around the world as Wizz Air, Volaris, JetSMART and Frontier continue to expand.”

All four of the airlines already operate all Airbus fleets, and already had some amount of Airbus narrow body aircraft before this Indigo Partners deal.

Frontier Airlines currently has a fleet that consists of 73 aircraft, including 18 A319s, 24 A320s, 13 A320neos, and 18 A321s. Before this order, Frontier had a total of 67 more A320neos on order, 18 A319neos, and 1 more A321 on order. This letter of intent states that Frontier will receive 100 more A320neos, and 34 A321neos, taking their fleet to roughly 250 aircraft once all of the current A319s and A320s are replaced.

A Frontier A320neo(Photo by Barry Sloan)

Volaris, Mexico’s third largest airline, is currently operating a fleet of 67 aircraft, with 35 A320neos on order. With this order, Volaris is designated 46 additional A320neos to bring the total number to 81 more on order, and 34 A321neos. This will take the Volaris fleet to nearly 200 aircraft by the time all of the aircraft are delivered.

Wizz Air currently operates a fleet of 87 aircraft with eight more A320s and 18 more A321s on order. Wizz Air originally signed a deal in 2015 for 110 A321neo aircraft, and now have 184 A321neo aircraft on order after the Indigo partners additional of 74 A321neos. The first A321neo aircraft will be delivered to Wizz Air in 2019 as part of the 2015 order. In addition to the A321neos, the Indigo letter of intent also designates 72 A320neo aircraft to Wizz Air. This deal will bring the Wizz Air fleet to over 300 aircraft, nearly tripling its size. This would make it one of Europe’s largest airlines, behind RyanAir and EasyJet.

JetSmart commenced operations on July 17th and operates a fleet of three A320 aircraft. The Indigo letter of intent includes 56 A320neos, and 14 A321neos. Since this airline is such a young airline, it remains to be seen if it can be financially successful long term, so it is not a sure bet that it will be around by the time that these aircraft are set to be delivered beginning in 2025.

A JetSmart A320 in Santiago. (Photo via from Sky KoreSCL via Wikimedia Commons)

Featured Image from Airbus

Categories: Industry Talk