PARIS: Indian budget airline IndiGo has signed a preliminary order with Airbus for 250 A320neo Family aircraft.

Airbus said the memorandum of understanding with IndiGo, India’s largest domestic airline, will become Airbus’ single largest order — ever — by number of aircraft.

Aditya Ghosh, president of IndiGo, said that this reaffirms their commitment to “the long-term development of affordable air transportation in India and overseas.”

The A320neo had its first flight only last month in France.

Airbus President and CEO Fabrice Bregier said it builds on “the outstanding success of the A320 Family.”

The A320neo “new engine option,” Airbus says, will reduce the amount of CO2 per aircraft per year to 5,000 tons.

IndiGo has the right to pull the plug on the order at any time.

IndiGo handed Airbus its biggest ever potential plane order — but shares in the planemaker slid on fears that the global economic engine underpinning recent jet demand is stalling.

The provisional order for 250 A320neo jets is worth nearly $26 billion at list prices and ranks as the largest single order of jets from Airbus based on the number of planes sold.

IndiGo is expanding aggressively as it seeks to win more market share in one of the world’s fastest growing aviation markets and cement its position as the country’s only profitable carrier.

The new plane order, confirming a Reuters report on Tuesday, leapfrogged what was then the industry’s largest order from the same airline in January 2011, when IndiGo helped to launch the fuel-saving A320neo with a $16 billion order for 180 jets.

But while then, shares in the Airbus parent group jumped 6 percent at the start of what developed into an extended bull run for aerospace stocks, investors spurned Wednesday’s even bigger deal and pushed Airbus stock down in a gloom-laden market.

Airbus sales chief John Leahy hailed IndiGo’s “very real” growth and dismissed recent warnings that overall commercial jet demand had reached the top of a cycle as the opinions of “nay-sayers who are almost guaranteed to be wrong.”

Asked about such warnings by some leasing executives and aerospace analysts, Leahy told Reuters: “I disagree strongly and this IndiGo transaction for 250 aircraft shows there is a lot of growth and dynamism left in the market.”

He said the order would be finalized in about 30 days.

Airbus and Boeing both maintain the global aircraft fleet is set to double in the next 20 years as airlines in countries such as India respond to fast-rising demand.

But some analysts say the factors that have until recently encouraged airlines to order new jets, such as strong growth outside Europe and high oil prices, are starting to unwind.

“Markets are reflecting growth concerns more than anything else and civil aerospace stocks are geared to GDP,” said Nick Cunningham, managing partner at London-based Agency Partners.

“But on top of this you have seen airlines being pounded, especially in the US, and it is inevitable that this will translate partly into movements in civil aerospace stocks too.

Investors also ignored a boost to Airbus’s A350 when it won coveted approval for very long trips over water.

Reuters reported on Tuesday that IndiGo was close to placing a large order worth billions of dollars for a variety of aircraft as it looks to expand.

The draft contract potentially closes a gap between Airbus and Boeing, which is so far winning their traditional annual order race.

But analysts also say orders have been somewhat erratic this year.

“This is a bright spot in a weaker order intake but doesn’t change the trend,” Cunningham said.

“The market may be saying ‘yes, but this is probably the last one’.”

The airline will start taking delivery of the planes from 2018 and has secured rights to buy a further 100 A320-family aircraft, Aditya Ghosh, Indigo’s President, told Reuters.

“We believe India is a highly underpenetrated market. Some of these (new planes) will go to replacement. It’s difficult to say how many at the moment, but a lot will be for growth.”

IndiGo, which sources have said is planning to list shares next year, has a fleet of 83 A320s and has ordered a total of 280 Airbus aircraft.