The Paris Air Show opened its doors to witness the largest-ever commercial jet order for Airbus (OTHEROTC:EADSF), through which it will deliver 500 narrow-body planes to India’s largest airline, IndiGo. The order size outpaces the low-cost carrier’s current fleet of 300 aircraft.
The fleets are scheduled for delivery between 2030 and 2035. The breakdown of the order (in terms of different A320 models) and the order value remain undisclosed. This adds to Airbus’ already existing May deliveries, which saw a 34% growth year-over-year. Also, the first five months Airbus orders stood at 144.
Furthermore, Airbus received an order for 30 A320neo family aircraft by Saudi Arabia’s Flynas and three A350 aircraft by Mauritius’s Air Mauritius.
Soaring Predictions for the Airline Industry
Last week, in its Global Market Forecast, Airbus indicated that Asia, mainly led by India and China, will reflect the strongest growth. It estimates its global fleet to more than double to 46,560 aircraft in 2042 (vs. pre-Covid level of 22,880 units at the start of 2020) with 23,680 planes representing growth and 17,170 accounting for older jets replacement orders.
Airbus CEO Guillaume Faury believes the company will increase its A320-family planes monthly production to 75.
“We believe there’s still plenty of room to grow domestic and even more so international,” IndiGo CEO Pieter Elbers commented. The airline, with an almost 60% market share in India, expects to fly more than 100 million passengers in FY24 compared to 86 million seen in the prior year. With this current order and its past orders, IndiGo has agreed to buy more than 1,300 jets from Airbus, thereby making it the world’s biggest A320 family.
Is Airbus a Good Stock to Buy Now?
Of the 13 Wall Street Analysts covering the stock, six rate it a Buy while four assigned a Hold and three stand with a Sell rating taking the average consensus analyst rating to Hold. Based on analysts offering a 12-month price target, the average price target is set at $149.65, marking a 3.9% upside potential.
Last week, the stock received a Hold rating initiation by RBC Capital Analyst Kenneth Herbert, with a price target of $153.11 implying a 6.3% upside potential. The analyst cited strong demand levels offset by supply chain problems impacting its 2025 upside. Contrarily, UBS Analyst Ian Douglas reaffirmed his Sell rating on the stock.
The stock price boasts a significant 20.8% gain on a year-to-date basis with the last 3 months accumulating 14.4%. Currently, the stock is sitting at its 52-week high-level price. Airbus’s expanding May order levels, a positive outlook for its aftermarket sales, its recent investments, and strong company fundamentals support the company’s growth trajectory.
In the last week, Goodyear Tire (GT) chose Airbus to provide tires for one of its advanced aviation products, the A321XLR. Also, the company disclosed its investment in a hypersonic startup, Venus Aerospace, which will enable cost-effective one-hour global transport.
