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MAY 2017

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IndiGo signs US$1.3 billion deal for 50 ATR 72-600s

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May 12th 2017

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In line with the Narendra Modi government’s ‘Regional Connectivity Scheme’, UDAN (Ude Desh ka Aam Anagrik), India’s largest airline, low-cost carrier, IndiGo Airlines, this week signed a Letter of Intent with ATR to purchase up to 50 ATR 72-600s. Read More »

However, the deal comes with a caveat. In their official communications, ATR said IndiGo had “the flexibility to reduce the number of aircraft based on certain conditions”. The turboprop manufacturer told Orient Aviation “there are indeed some conditions open” without specifying what they were.

The aircraft will join the IndiGo fleet quickly. First delivery is scheduled for the fourth quarter of 2017. If the carrier takes all 50 ATRs, the deal would have a list value of more than US$1.3 billion, one of the biggest contracts ATR has received.

UDAN aims to boost economic development, employment and tourism by connecting small and remote cities. Modi said 100 new airports would be built within the next two to three years and airlines will receive financial support and other incentives to make regional air travel more affordable.

Prime minister Modi launched UDAN in late April, when Air India subsidiary, Alliance Air, commenced a five-weekly Shimla-New Delhi ATR flight on April 28, Shimla Airport’s first scheduled service in five years. “Why should air services only be for the elite in this country? Under these [UDAN] flights, you can fly for as low as Rs 6 to Rs 7 per kilometre (US$0.1) and reach Delhi from Shimla in an hour," Modi said at the Shimla launch.

India’s rapidly expanding domestic market represented close to 100 million passengers in 2016 and has been growing by more than 20% annually. It is forecast to become the world’s third largest market by 2020.

IndiGo president, Aditya Ghosh, said: “we are embarking on a journey to build a nation-wide regional network and connect cities that have not benefitted from the growth in Indian aviation. The ATRs low operating costs will help us build a large regional air travel network with reasonable fares. These aircraft will feature modern cabin interiors, making the flight a comfortable experience for our passengers. The ATR’s outstanding operational versatility, along with their capabilities to land in remote airports with limited infrastructure will help us manage our operations efficiently.”

Until now, the carrier has been an all-Airbus operator, although there will hardly be any rivalry between Airbus and ATR, given Airbus Group’s 50% stake in the turboprop maker. The Delhi-headquartered carrier has 132 A320s, including 20 A320neo, and is the largest operator of the re-engined single aisle aircraft.

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