IndiGo Airlines (6E, Delhi International) has signed a USD2.6billion Memorandum of Understanding (MoU) with the Industrial and Commercial Bank of China (ICBC) in which the Chinese institution will finance the acquisition of 30 new A320 aircraft for the Indian carrier from Airbus (AIB, Toulouse Blagnac).

Under the MoU's terms, the ICBC will provide IndiGo with financing for the planes through either a sale/lease-back or commercial lending agreement IndiGo's president, Aditya Ghosh, said in a statement.

Having commenced operations in 2006, IndiGo is a LCC owned by Rahul Bhatia’s InterGlobe Enterprises. With a fleet of ninety-one A320-200s, the carrier operates an extensive domestic network in addition to international services to Bangkok Suvarnabhumi, Dubai International, Kathmandu, Muscat and Singapore Changi.

Meanwhile, rival operator, SpiceJet (SG, Delhi International), has announced plans to reduce its capacity amid intensifying competition from AirAsia India (Bangalore International) parent, AirAsia (AK, Kuala Lumpur International). Alongside a decision to defer delivery of two B737-800s to next year, the carrier returned two 14-year-old aircraft to lessors three weeks ago, and will consider removing other older planes to improve fleet efficiency and cut fuel costs, chief operating officer Sanjiv Kapoor told Bloomberg news.

"Any short-term capacity gaps may be filled by dry lease-ins," Kapoor said. "We believe there is overcapacity in the market in the near term."

The LCC, which operates twenty-nine B737-800s, six B737-900(ER)s, and fifteen Dash 8-400s, has also stopped services to some cities including Guangzhou and Riyadh.