Airbus developed a new version of the A320, called A320neo, for new engine option, based on more efficient engines, at least partly in response to the threat posed byBombardier Aerospace's development of the CSeries airliner, with which Bombardier hoped to compete directly with Boeing and Airbus for the first time. The choice for new engines include the CFM International LEAP-1A and the Pratt & Whitney PW1100G. Though the new engines will burn 16% less fuel, the actual fuel gain on an A320 installation will be slightly less, since 1–2% is typically lost upon installation on an existing aircraft. This means an additional range of 950 km (510 nmi), or 2 t (4,400 lb) of extra payload. The A320neo will also include some modifications to the wing, mainly the installation of blended winglets called "Sharklets".
Airbus' CEO said to be "comfortable" with the projections of 20% lower maintenance cost for the Pratt & Whitney's PW1000G family, compared with engines powering the A320. In 2011, Airbus targeted early 2016 for the first delivery and planned to deliver 4,000 A320neo over 15 years. Virgin America became the launch customer with a firm order of 30 A320neo aircraft as a part of a 60 aircraft order on 17 January 2011. In January 2011 IndiGo reached a tentative agreement with Airbus to order 150 A320neo aircraft along with 30 more A320s.
At the 2011 Paris Air Show, Airbus announced firm orders from GECAS, Scandinavian Airlines System, TransAsia Airways, LAN Airlinesand GoAir along with major orders from Indian low-cost carrier IndiGo for 150 aircraft and Malaysian low-cost carrier AirAsia for 200 A320neo, the largest commercial aviation order at the time. In total the A320neo received a combined 667 commitments worth US$60.9 billion. American Airlines placed an order 130 A320neo airliners on 20 July 2011. By the end of 2011, Airbus had received 1,196 firm orders for the A320neo family making it the fastest selling commercial aircraft in history. On 15 March 2013, it was reported that Turkish Airlines had placed a firm order for 82 A320 aircraft with 35 options; the firm order has 25 A321, four A320neo, and 53 A321neo airliners.