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Plane Sailing

Posted June 21, 2023 at 12:30 pm
Finimize

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

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