Asset Classes

Free investment financial education


Multilingual content from IBKR

Close Navigation
Learn more about IBKR accounts

Plane Sailing

Posted June 21, 2023 at 12:30 pm

What’s going on?

Airbus, the European aircraft behemoth, just hit a sky-high record, inking a deal to sell 500 planes to IndiGo.

What does this mean?

The global aviation industry has been on a rollercoaster ride lately. A few years ago, it was all about grounded fleets and massive losses. But fast forward to today, and we’re seeing soaring profits and gung-ho airlines outbidding each other with record orders. The Paris Air Show, taking place this week after a four-year hiatus, is the perfect stage to showcase that newfound pizzazz – and Airbus has gone and stolen the show, bagging the biggest aircraft order in history from IndiGo, India’s largest airline by market share.

Why should I care?

Zooming in: Possible turbulence.

All that gusto has got some industry veterans warning that airlines might be biting off more than they can chew. Just months ago, Air India set a record with an order for 470 aircraft. Add to that the huge purchases by Ryanair and Saudi startup Riyadh Air earlier this year, and we’re looking at announced deals nearing 1,500 airplanes. See, if economic growth slows and travel demand dips after the post-pandemic rush, airlines could find themselves back in the red. And if that proves to be the case, then they could be back to their loss-making ways sooner than Ryanair starts charging passengers to use the toilet.

The bigger picture: High-flying future.

This deal is more than just a feather in the cap for the aviation industry: it’s a testament to India’s growing global stature. After all, India recently leapfrogged China to become the world’s most populous nation – and unlike China, India’s population is predominantly young and growing. So, with half of its population under 30 and over two-thirds in the working age bracket, it’s no wonder India’s on track to become the world’s fastest-growing major economy in the near future.

Originally Posted June 20, 2023 – Plane Sailing

Join The Conversation

If you have a general question, it may already be covered in our FAQs. If you have an account-specific question or concern, please reach out to Client Services.

Leave a Reply

Disclosure: Interactive Brokers

Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Finimize and is being posted with its permission. The views expressed in this material are solely those of the author and/or Finimize and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

IBKR Campus Newsletters

This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.