Airbus Wins In India

Airbus just got the largest order for commercial airliners ever: $15 billion, according to list price.

IndiGo Airlines, a low-budget local carrier, is buying 180 place, including 150 A-320’s, the short- to medium-range narrow-body aircraft, Airbus’ equivalent to the Boeing 737.

These types of aircraft are the bread-and-butter of Airbus and Boeing—profit margins are good, they’re fungible, and can land on most runways, thereby making them exceedingly flexible.

Airbus might have had a bit of a mishap with the Rolls Royce engines of its double-decker A-380, but where the money counts—the A-320—they’re good.

The real news, though, is IndiGo Airlines: This big order is on top of a previous 100 aircraft order from Airbus, and a fleet of 32 A-320’s in operation.

What does that tell you? It tells you that airlines in India are something worth checking out: No one plunks that kind of cash for ego and prestige. The big monster A-380? Yes, an ego plane, certainly (“Mine is bigger than yours! So hah!”).

But no one goes and buys workhorses like the A-320 to look cool—you buy them ’cause you’re making money hand over fist.

Reminds me of LAN, the Chilean airline, back in the Nineties: No one gave them a second’s thought. But steadily, quietly, they were making money, especially in cargo—‘til now, LAN pretty much owns the Latin American skies.

We wonder how much of IndoGo Airlines’ sales is cargo. Something to look into.