Reuters/Paris

Indian budget airline IndiGo has finalised the purchase of 250 A320neo aircraft, Airbus said on Monday, handing the European company its biggest-ever order by number of planes in a deal worth $26.55 billion at list prices.

The agreement, which Airbus said was signed on Saturday, confirms an earlier provisional order by IndiGo for the 250 narrow-body planes announced in October.

IndiGo, which has grown rapidly to become India's biggest airline by market share, has now ordered 530 A320 family planes from Airbus, the planemaker said in a statement.

The deal also makes IndiGo the largest airline customer for the Airbus A320-family of aircraft. Other large A320 customers include low-cost carriers such as Malaysia's AirAsia  and Indonesia's Lion Air.

It is also the second-largest order by value for Airbus.

The A320neo is the re-engined and upgraded variant of the A320 family of planes and competes against Boeing's upgraded  737 Max in the narrowbody market segment.

Boeing has projected that narrowbody aircraft, which are used on flights of up to around five hours, will account for 70 percent of the planes required over the next 20 years.

IndiGo's deal extends the Airbus lead against Boeing in the orders for the upgraded narrowbody aircraft.

Boeing has secured 2,831 orders for its 737 Max plane, according to data on its website, while Airbus said that it has over 4,100 orders for the A320neo with this order.

Founded in 2006 by travel entrepreneur Rahul Bhatia and Rakesh Gangwal, a former chief executive of U.S. Airways, IndiGo has placed a series of aggressive orders for Airbus jets as it tries to win a bigger share of India's fast-growing aviation market.

IndiGo flies one in three of India's air travelers. Its owner, InterGlobe Aviation, file in June a draft prospectus for an initial public offering. It had said in the prospectus that the terms of the 250 aircraft order had expired, raising concerns about the deal.