Airbus basked in the world's biggest commercial plane order on Wednesday, with shares in parent EADS lifted by news of its $15.6 billion 180-aircraft deal with Indian airline IndiGo.
The agreed purchase underlines India's development as a major aviation market and provides a welcome boost to EADS Chief Executive Louis Gallois, who has been pushing expansion into emerging markets as traditional markets falter.
It also gets an early blow in for Airbus in the annual battle with U.S. rival Boeing for sales supremacy.
It is the best way to start the year. I can't underestimate the size and importance of this deal, Gallois told an annual news conference.
Gallois also set the tone for what could be a backlog of more announcements, giving Airbus a chance of beating Boeing for 2010, by disclosing it had bagged more than 500 orders and deliveries for the year.
The world's largest planemaker has so far reported 388 net plane orders up to end-November, or 440 before adjusting for cancellations. It delivered 461 planes in that period.
Boeing sold a net 530 planes and delivered 462 in 2010.
EADS shares hit a three-year high on the news and were 2.3 percent higher at 20.54 euros at 1400 GMT, after earlier rising by as much as six percent.
Indian budget carrier IndiGo's provisional order includes 30 classic A320s -- Airbus's best-selling model which carries 150 people on short and medium routes -- and 150 upgraded versions of the same type of aircraft, called A320neo.
Analysts at DZ bank, which has a sell recommendation, said investors would nevertheless remain nervous about profitability in the short term amid European defense cuts and the threat of production delays to the next Airbus plane, the mid-sized A350, which has a similar design to the delayed Boeing 787 Dreamliner.
IndiGo said it would take delivery of the first aircraft in 2015 and was considering an IPO to finance the purchase. The provisional deal is the biggest single order in commercial aviation history by number of planes with more than 100 seats, Airbus said late on Tuesday.
This contract fully validates my conviction that EADS is worth having among the top picks for 2011. I believe the stock can still double from here in the next 18 months, one Paris-based trader said.
India's aviation sector, which has close to a dozen carriers, is expanding fast as an economy growing at nearly 9 percent revives air travel. Indian domestic airlines carried roughly 46.8 million passengers through November last year, compared to 230 million in China a year earlier.
IndiGo is the third-largest domestic carrier by market share after less than five years flying. It is owned by InterGlobe Enterprises and industry veteran Rakesh Gangwal, a former chief executive of U.S. Airways.
While passenger traffic in India grew 19 percent through November last year, the country has only 400 commercial airplanes. By comparison, China has 2600 planes.
Many Indian carriers are growing their fleets as demand booms. IndiGo's main rival SpiceJet in November agreed to buy 30 Nextgen turboprop aircraft from Canada's Bombardier Inc for as much as $915 million.
EADS PROFIT TAKING OFF FROM 2012
Gallois expects EADS profit to recover from 2012 after being held back by hedging, costs and government spending restraint.
Core profitability this year will be around the target for 2010, he said. EADS aims to bounce back to an operating profit of at least 1.1 billion euros ($1.4 billion) in 2010 after a 322 million euro loss in 2009, but Gallois called the level still unsatisfactory because of currency drag and high costs.
Gallois added that the troubled Airbus A380 superjumbo program was out of the woods and reiterated its target to start deliveries of its A350 model in the second half of 2013.
Engine checks on the world's largest airliner following last month's Qantas emergency scuppered Airbus's hopes of meeting a target of delivering 20 A380 superjumbos in 2010.
Gallois played down who will succeed him in his politically sensitive post in 2012, saying this wasn't an issue at present.
EADS was formed in 2000 from a merger of French, German and Spanish interests in a bid to create a European rival to larger U.S. giants such as Boeing and Lockheed Martin.
But it has been rocked by frequent in-fighting over the Franco-German power balance and secret U.S. cables leaked by the Wikileaks website suggested tensions over ownership of sensitive technology had resurfaced inside its Astrium space division, which builds the Ariane 5 space rocket.
Astrium space division chief Francois Auque said a German space executive who was reported to have briefed U.S. officials on a plan to keep France out of an intelligence satellite program faced internal questioning about the allegations.
(Additional reporting by Blaise Robinson; Writing by Alexander Smith; editing by Andrew Callus)