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Indigo has ordered ATR for 50 more 72-600 aircrafts in a $1.3 billion deal; will operate in regional sectors

India’s largest airline carrier by market share, Indigo has ordered for a total of 50 ATR 72-600 aircrafts in an attempt to increase its domestic fleet to a greater number. The move has been taken in order to increase the airline’s operation in regional sectors. These aircrafts will fly between the smaller cities where airline service is not so strong yet.

With this move, Indigo expects to grow bigger in the Indian domestic aviation space. The deal is valued at more than $1.3 billion and these aircrafts will commence operation from late 2017. Interestingly, Indigo has placed the order of these 50 ATR 72-600 aircrafts right after Government of India has launched its Regional Connectivity Scheme dubbed as UDAN.

With the new move connectivity between smaller and remote cities are expected to grow at an increased pace, while the economic development is also likely to grow faster alongside development of tourism and employment. Indian domestic aviation sector has seen a rapid growth in recent past. The recent trend shows that passenger opt for travel by air rather than train or by road, as air travel saves time and also because of reduced air fare.

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In 2016 alone, around 100 million passengers travelled by plane in domestic sector and the number is growing at a steady pace of 20%. By the end of this decade, India is expected to become the third largest market in terms of domestic air travel. The Regional Connectivity Scheme UDAN will boost the growth further. Under this scheme, 100 new airports will be built within next 2-3 years.

Airline companies will get financial support and other incentives to sell ticket at cheaper rate. India’s new order for 50 new aircrafts seems be complying with the government’s strategy to increase connectivity between small cities. No wonder, with these 50 aircrafts in its fleet, Indigo will be able to strengthen its position further in a highly competitive sector.

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