Monday, June 28, 2021

Where have all IndiGo’s ‘CEOs’ gone?

In January 2016, IndiGo held its first post-listing earnings call. That time, the airline had a fleet of 111 aircraft. Analysts were eager to know when the A320neo would be inducted and the alternative plan for fleet augmentation due to the delay.

The airline had converted its 30 A320ceo to neo and was looking at a lease from the open market to fill in the shortfall due to the delay in the delivery of the A320neo. This saw the airline look at TigerAir for additional aircraft and just about any available A320ceo in the market.

By this time, the VT-INA, the first aircraft of the airline, had been long re-delivered in line with its philosophy of operating an aircraft on a six-year lease to avoid expensive engine shop visits and maintenance checks. This also helped to keep the fleet young.

But the airline had to deviate, primarily due to the delays from aircraft maker Airbus and engine company Pratt & Whitney. IndiGo had an active fleet of 130 A320ceo at the end of March 2017—its highest-ever active count of the A320ceo. Overall, the airline operated 158 A320ceo in its fleet.

Now, the airline has only 59 of them active. This is a mere 38 per cent of the total ‘ceo’ aircraft it operated. Another 21 per cent, or 34, are either stored or are in process of re-delivery at various airports across the world. These airports (Jakarta, Istanbul, Ammam) have large MROs known for re-delivery checks, et al.

Twenty two of the 158 aircraft are with the lessor and may either be scrapped or wait for an opportunity to be placed with another operator, while 43 are already flying for other airlines.

This includes Scoot, the rebranded TigerAir, from which the airline had initially inducted the older aircraft.

The airline had placed an order for 100 A320 aircraft at the Paris Air Show in 2005. Forty one A320s are still active in its fleet.

The airline then took 58 from the open market, and not directly from the manufacturer, unlike the first lot of 100. With a razor-sharp focus on reducing cost and keeping the fleet ready for the future, the airline has been phasing out or storing the A320ceo rapidly to ensure that it operates more of the neo family aircraft.

28/06/21 Ameya Joshi/Moneycontrol

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