Monday, August 14, 2023

IndiGo still has time to be a Pratt & Whitney-mukt airline

IndiGo, India’s largest carrier by fleet and market share, declared its best ever quarterly results on August 2. At Rs 3,091 crore, the quarterly profit shadow that of any other listed airline in India in the past and is double of IndiGo’s previous best. Yet the next day, its share opened lower, seeing a drop of over 1 percent while the benchmark index was trading flat.

The worrying trend for analysts was possibly the news that the number of grounded aircraft due to lack of engines stands around 40. Having 13 percent if its 310-strong aircraft fleet grounded does not paint a pretty picture of an airline. The same week as the results, there was news of further issues with the Pratt & Whitney (P&W) engines on some of its aircraft which may require additional checks for which the planes may have to be grounded, albeit temporary, at least for the duration of the inspections.

An airline that is as committed as IndiGo towards fleet renewal had to rely on inducting an old Airbus A320ceo to its fleet to make up for the shortfall.

P&W has had a chequered history in India, with the engine supplier falling behind in supplying replacement engines and/or parts, with Go First accusing the engine maker for its grounding.

As per last count, IndiGo has a fleet of 167 A320neo’s in its fleet. Of this, 112, or over 65 percent, are P&W-powered A320neo with the remaining using CFM Leap engines. IndiGo signed up with CFM in 2019 and followed it up with another deal in 2021 to power its A320neo family. The latest, record breaking order for 500 aircraft, which was placed at the Paris Air show, is due for delivery only after 2030 and thus the airline has time to select the engines. Given its track record, though, P&W is a long shot as the engine of choice.

IndiGo has an even larger order book for the A321neo. For now, it has 87 A321neo aircraft in fleet, only 25 or 28 percent of which are equipped with P&W engines, with the rest being powered by CFM. This means that if aircraft are grounded for lack of engines or parts, as has often been the case with planes with P&W engines, the airline has recourse to more of the higher capacity aircraft helping add capacity (by ASK or available seat kilometre) when needed. All the aircraft coming in the later part of 2020 are fitted with CFM engines.

14/08/2023 Ameya Joshi/Moneycontrol

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