Re-engined with CFM International LEAP or Pratt & Whitney PW1000G engines and fitted with sharklet wingtip devices as standard, the A320neo is 15% to 20% more fuel efficient than prior models, the A320ceo.

In 2006 Airbus started the A320 Enhanced (A320E) programme as a series of improvements targeting a 4–5% efficiency gain with large winglets (2%), aerodynamic refinements (1%), weight savings and a new aircraft cabin.

The installation adds 200 kilograms (440 lb) but offers a 3.5% fuel burn reduction on flights over 2,800 km (1,500 nmi; 1,700 mi).

[5] Compared to the re-engine improvement of 15%, an all-new single-aisle would have brought only 3% more gain while high volume manufacturing in carbon fibre could be much more expensive.

[8] On 1 December 2010, Airbus launched the A320neo "New Engine Option" with 500 nmi (930 km; 580 mi) more range or 2 t (4,400 lb) more payload, and planned to deliver 4,000 over 15 years.

The changes impact flying qualities, performance and system integration; they entailed retuning the fly-by-wire controls and meeting type certification requirements which have evolved since 1988, and helped decrease the minimum V speeds.

[29] Two hundred deliveries were targeted in 2017, but as Pratt & Whitney faced ramp-up difficulties, Airbus expected that thirty aircraft would be parked awaiting engines.

[33] In February 2018, after in-flight failures of the PW1100G with its high pressure compressor aft hub modified, apparently caused by problems with its knife edge seal, European Aviation Safety Agency (EASA) and Airbus grounded some A320neo family aircraft until they were fitted with spares.

[36] By the end of June, Airbus expected to have around 100 A320neos awaiting engines and aimed to deliver most of them in the second half of the year, for a total of over 800 aircraft handed over in 2018.

[37] After the three-month halt, the goal of 210 GTF-powered deliveries in 2018 was expected to be missed by 30–40 unless Pratt could accelerate production, exposing itself and Airbus to late penalties.

Other A321XLR sections are to be produced at numerous sites: the centre wing box at Airbus's Nantes facility, the rear centre tank at Premium Aerotec in Augsburg, the nose and forward fuselage built at Stelia Aerospace in Toulouse then assembled in Saint-Nazaire, and the wings at Airbus Broughton in cooperation with Spirit Aerosystems and FACC [de] which provide high-lift devices.

[51] At the November 2019 Dubai Airshow, Airbus CEO Guillaume Faury said the company was considering the launch of a single-aisle programme in the second half of the 2020s for an introduction in the early 2030s.

[52] In June 2023, Faury said work had begun on eAction, a 20–25% more efficient successor to the A320neo family targeted for a 2035-2040 introduction and more conventional compared to the Airbus ZEROe hydrogen project.

[53] In February 2024, Faury confirmed that the successor aircraft, dubbed Next-Generation Single-Aisle (NGSA), would be designed specifically to run on sustainable aviation fuel to achieve carbon neutrality by 2050.

[62] In May 2021, Airbus announced that for improved aerodynamic performance the wing will be longer and thinner with folding wingtips to access existing airport gates.

[61][69] By January 2019, three years after its introduction, 585 neos were in commercial service with over 60 operators, led by IndiGo (87), Frontier Airlines (33) and China Southern (26).

Lufthansa confirms the PW 16% fuel savings, 21% per seat with denser 180-seat layout up from 168, while Avianca states its LEAPs are 15–20% more efficient, quieter, reduce oil consumption and routine maintenance.

[73] In July 2019, Airbus disclosed two outwardly similar, though separate, issues which could result in excessive pitch up behaviour, one affecting the A320neo and the other the A321neo.

[76] In 2018, Airbus explored the possibility of military versions, for VIP transport, intelligence, surveillance and reconnaissance and maritime patrol for the armed forces of France, Germany and the Netherlands; or Asia-Pacific nations such as Indonesia, Malaysia, New Zealand, and the Philippines.

[85] In July 2018, Airbus was evaluating an A320neo variant for ISR missions, particularly maritime patrol and anti-submarine warfare, and military transport.

The aircraft could be fitted with a weapons bay, a self-protection system, or a magnetic anomaly detector and could be configured for signals intelligence or Airborne Early Warning and Control.

[106] The first A321neo, leased by GECAS, was delivered in Hamburg to Virgin America, configured with 184 seats and LEAP engines, and entered service in May 2017.

[116] The A321XLR was launched at the June 2019 Paris Air Show, with 4,700 nmi (8,700 km; 5,400 mi) of range from 2023, including a new permanent Rear Centre Tank (RCT) for more fuel, a strengthened landing gear for a 101 t (223,000 lb) MTOW; and an optimised wing trailing-edge flap configuration to preserve take-off performance.

[121] On 25 April 2019, the ACJ319neo, outfitted with five ACTs, completed its first flight, before a short test campaign and subsequent delivery to German K5 Aviation.

[127] In less than a year, by the November 2011 Dubai Airshow, the family had reached 1,420 orders and commitments, making it the "fastest selling aircraft ever".

As a result, Airbus was unable to offer the A320neo at a price which United Airlines deemed "competitive", leaving it with a Boeing-skewed fleet.

[153] On 15 November 2017 Airbus announced the signing of a MoU with Indigo Partners' four portfolio airlines for 430 A320neo family aircraft – a deal worth nearly $50 billion.

[156] On 18 November 2019, the low-cost carrier Air Arabia ordered 120 A320neo family jets worth $14 billion at list prices: 70 A320neos and 50 A321neos/XLRs, to be delivered from 2024.

[162] On 2 September 2022, TAP Air Portugal Flight 1492, an Airbus A320neo registered as CS-TVI, from Lisbon to Conakry International Airport hit a motorbike during landing.

[163] On 18 November 2022, LATAM Perú Flight 2213, an Airbus A320neo registered as CC-BHB, collided with a fire engine that was crossing the runway during takeoff, killing two firefighters and injuring a third, who died several months later.