What's going on?

At the Dubai Airshow on Wednesday, aerospace companies Airbus and Boeing together closed more than $75 billion worth of deals to build new aircraft for carriers around the world � with Airbus claiming one of the largest orders in the company�s history!

What does this mean?

Airbus secured a deal to sell 430 jets to Indigo Partners, an investment firm that will lease them to several low-cost carriers it partially owns, including Frontier Airlines, Mexico�s Volaris and Europe�s Wizz Air. While plane manufacturers usually end up selling jets in bulk at about a 50% discount to the announced price, the deal is still a welcome rebound for Airbus, which has struggled to match its rival Boeing this year and is weighed down by disputes with Emirates Airlines over delivery of its massive A380 double-decker jet.


Boeing, meanwhile, announced that it would be selling about $27 billion worth of planes to FlyDubai, a carrier in the United Arab Emirates.

Why should I care?

The bigger picture: Once minor players in the sector, low-cost carriers are beginning to come of age.

In markets like South Asia, low-cost carriers already account for nearly 50% of all air traffic, while in more developed regions like Europe and the United States, they account for somewhere around 30%. On top of that, new leasing deals which effectively let airlines rent aircraft mean that upstart carriers don�t have to spend as much upfront to get planes in the air. However, low-cost carriers will need to prove that they�re expanding in step with actual customer growth, and not overheating � as some airlines may be doing…


For markets: Boeing and Airbus are both flying high in 2017.

Shares in Boeing have nearly doubled this year as the company has made efficiency gains in manufacturing, and demand for Boeing�s smaller passenger jets have led it to boost production levels by nearly 40%. Airbus�s stock has also performed well this year, as its short-haul, single aisle commercial jets are proving popular with high-growth low-cost carriers.