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Saturday, April 20, 2024

Paris Air Show Takes Off With Historic Plane Order

There was manic yet tentative jubilation on day one of the Paris air show on Monday, with an industry jubilant about the strong demand for jets and air defenses even as supply chains buckle. But a muted undercurrent set the tone for the event, which returned to Paris-Le Bourget Airport after the COVID-19 pandemic canceled its 2021 edition.

The highlight was the record 500-plane deal signed by IndiGo with Airbus (AIR.PA), a massive order for the airline’s single-aisle A320 family that will help it expand into new markets. The agreement is worth tens of billions of dollars and eclipsed Air India’s provisional purchase of 470 Airbus and Boeing (BA.N) jets announced earlier this year. IndiGo chief executive Ashwani Chandrasekaran said the deal “enables us to fulfill our vision of promoting economic growth, social cohesion and mobility in India by increasing the fleet of our aircraft to 1,000 well into the future.”

Airbus also notched up deals with Flynas, a Saudi Arabian budget carrier that will take 30 A320neos, and Air Mauritius, which will get three wide-body A350s to serve long-haul routes to Europe and South Asia. Industry executives say as many as 2,000 new commercial jet orders could be unveiled this week in a resurgent market. But that will only give an accurate picture of the strength of the market when they appear in the backlogs at airlines by year-end, analysts say.

Locking in jets so far ahead carries risks, with escalation clauses potentially adding billions to the price when the planes are delivered by the decade’s end. Experts say that only airlines with tight control of costs or strong political support can afford to do that.

This year’s show has a new focus on defense in the wake of Russia’s invasion of Ukraine, along with an emphasis on sustainable aviation fuel, with French President Emmanuel Macron arriving at Le Bourget in a helicopter partly powered by jet fuel made from recycled bio-gas. There is also a strong emphasis on drones, with the world’s top manufacturers displaying prototypes in front of a crowd of thousands.

TPG’s Ian Petchenik is at the show and will file behind-the-scenes photos, videos, news, and more for the TPG blog. Sign up for his daily business briefs, delivered free to your inbox every morning.

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