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India's IndiGo orders 30 Airbus A350s in bet on long-haul routes

An IndiGo airlines passenger aircraft taxis on the tarmac at Chhatrapati Shivaji International airport in Mumbai

By Nandan Mandayam and Aditi Shah

BENGALURU/NEW DELHI (Reuters) -IndiGo, India's top airline by market share, on Thursday placed its first-ever order for wide-body aircraft as the low-cost carrier intensifies its efforts to take a bigger slice of the international travel business from dominant Gulf airlines.

IndiGo placed an order for 30 A350-900 aircraft and expects deliveries to begin in 2027. It also has purchase rights for an additional 70 Airbus A350 family planes.

While Airbus no longer publishes prices, its latest deal with IndiGo's would be worth more than $9 billion, as per the last catalogue rates published in 2018. In practice, industry sources say airplanes are sold for less than half the listing price after typical discounts for bulk orders.

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Indian carriers are trying to keep pace with the air traffic growth in the country, where demand for both domestic and international air travel has surged post-pandemic, even as plane manufacturers struggled to meet output goals.

The number of international air travellers in India is expected to grow to 160 million by 2030 from 64 million in 2019, according to industry and government data, but the bulk of the traffic still goes to foreign carriers, such as Emirates.

Foreign airlines accounted for 55% of outbound international traffic from India in the final quarter of last year, according to latest government data.

IndiGo's new order will allow the airline to fly for the first time non-stop to destinations in Europe and North America, bypassing the Gulf, and as far afield as Australia to the Far East.

The new fleet "will allow IndiGo to embark on its next phase of becoming one of the leading global aviation players", the airline's chief executive, Pieter Elbers, said in a statement.

IndiGo, which has a 60% share in India's domestic aviation market, aims to double its total capacity by the end of the decade and expand its network in international markets.

IndiGo currently deploys 27% of its capacity, in the form of available seat kilometres, on international routes.

The airline recently started flying to destinations in Africa, West Asia and Southeast Asia, and is also growing its presence in Europe through its codeshare partnership with seven carriers, including Turkish Airlines and KLM.

IndiGo is already one of Airbus's largest customers for narrow-body planes but had initially been tipped to pick rival Boeing's 787s for its long-haul expansion, Reuters reported last August.

Analysts said Boeing's production problems and a marketing counter-offensive by Airbus appeared to have rescued the deal for the European planemaker, first reported by Bloomberg in March.

(Reporting by Nandan Mandayam in Bengaluru and Aditi Shah in New Delhi, additional reporting by Tim Hepher in Paris; Editing by Sohini Goswami, Savio D'Souza and Tomasz Janowski)