Airbus closes biggest sale of commercial aircraft in history – 06/19/2023 – Market

The European aircraft manufacturer Airbus announced this Monday (19) the biggest sale of the sector in number of aircraft in history. The Indian low-cost company IndiGo will buy 500 A320neo models, consolidating the position of the Asian country as a major emerging power in commercial aviation.

Earlier this year, Air India, which is managed by the industrial megagroup Tata, had made the biggest purchase so far on the market, with 470 aircraft divided between Airbus and its American archrival Boeing.

This Monday’s announcement was made at the opening of the Paris Air Show, which alternates with the British Farnborough as the world’s main aerospace showcase. The biennial event had been canceled in 2021 due to the Covid-19 pandemic, and has returned in style.

There are geopolitical nuances. Indian Prime Minister Narendra Modi will make a state visit to the US later this week. Several deals, mainly in the defense area, will be announced – but apparently French President Emmanuel Macron had the last smile over his colleague Joe Biden.

France is, with Germany, the largest shareholder in the European consortium that commands Airbus, with 10.9% of the total common shares (with voting rights). There’s a slight vengeance too: The US this year struck a military pact with Australia that stripped the French of a multibillion-dollar contract to supply attack submarines.

The European manufacturer had dominated the world market in 2022, delivering 661 planes, compared to 480 from Boeing. But the Americans are on a strong recovery after the serious crisis of their new model 737 MAX, which was 20 months on the ground due to technical problems that caused two fatal accidents.

Last year, Boeing sold 40% more than in 2021, while Airbus grew by 8%. Both results are also due to the gradual recovery of the commercial aviation market after the height of the pandemic, from 2020 to 2021, which brought down travel worldwide.

The role of India, the most populous country in the world, seems central to the future of the business. The Air India deal was bigger in terms of amounts involved, although no one officially discloses them, as it included several models of planes for longer, bigger and more expensive flights, such as the Airbus-A350, Boeing-787 and Boeing-777X .

Market estimates are that that business generated US$ 80 billion (R$ 382 billion today) for manufacturers, while the one announced today could be above US$ 50 billion (R$ 239 billion) —with the difference that now only the Europeans won. The price of Airbus shares had a jump in the beginning of the European trading session, but ended the day with a slight increase of 0.44%.

IndiGo is a private company, founded in 2006, and in May it dominated 61.4% of Indian domestic routes — 1,600 daily flights. The second place is Air India, with a distant 9.4% of the market, but that wants to change that.

In 2022, its long privatization was completed, and control passed to Tata — whose founder had created Air India 90 years ago, only to see it nationalized after India’s independence from the British Empire in the late 1940s. with the giant order at the beginning of the year, the plan is for expansion.

According to market analysts, post-Covid demand is around 2,000 planes in the short term. At the Paris Air Show, Airbus highlighted its new version of the A321, which is capable of intercontinental flights while maintaining the configuration of a plane with a single aisle —and making its operation cheaper.

The company should also announce business with Saudi, a Saudi Arabian company, and with the Australian Qantas, which wants A220 models for its regional market — the plane, developed by the former Canadian Bombardier before being bought by the Europeans, is a direct rival of the aircraft. regional offices of the Brazilian Embraer, the third largest manufacturer in the world.

The company from São Paulo will have as its star the usual E-195E2, which has had difficulty finding a market niche, but mainly two military aircraft. One is the KC-390 freighter, which is gradually entering NATO’s crowded and vital arsenal, and the other is a special version of the classic A-29 Super Tucano, already prepared to operate with the systems of the military alliance that unites the USA, Canada and 29 European countries.