The “Airport Rush” may be something you are familiar with if you have been returning home over the festive season. If not, I’m sure social media did a good job of raising awareness.
The festive season will increase demand for passengers. Travel will increase. As a result, more planes are required to meet the demand. But what if there aren’t enough planes available during the peak travel season? With limited aircraft, the airlines would end up exploiting passengers at high prices. More passengers would wind up at the same time period at airports. Hence, Airport Mayhem! The airlines must make sure that the number of aircraft meets passenger demand in order to avoid all of that.
Even though 2022 would see an increase in passenger volume over the previous two years, India’s Aviation Authority has permitted fewer flights than in 2021 for the winter months.
Around 10-12% of the Indian fleet has been impacted by problems with the global supply chain, which has led to fewer flights on some important routes.
Grounded Aircraft is a hole in Airline Budgets! Mark Martin, CEO of Martin Consulting, asserted that supply chain problems contribute to higher airfares because leasing payments for grounded aircraft still need to be made, which depletes airline budgets.
Last year, both airlines had to ground aircraft as a result of supply chain hiccups that put off Pratt & Whitney deliveries of aircraft engines. Now, the US engine manufacturer is finally prepared to deliver. Even if there has been improvement, Pratt & Whitney’s supply chain problems may not be fully resolved for some time.
Since the COVID-19 pandemic broke out, Indian Airlines have had financial difficulties as a result of the country’s high cost of Aviation Turbine Fuel (ATF). What are the other challenges for IndiGo and GoFirst?
P&W Engine Supply Disruption
According to senior executives close to the engine manufacturer, P&W is eager to finish up its backlog of engine deliveries by the end of the current fiscal year.
About 200 Airbus A320neo aircraft operated by Go First and IndiGo are powered by P&W engines. In November, the paucity of engines and replacement parts forced the grounding of more than 50 GoFirst and IndiGo aircraft.
Senior P&W executives met with Go First and IndiGo executives in November to discuss solutions to address problems with engine supply in India. P&W is actively addressing the supply chain disruption, according to the executives, and was to be in much better form by the end of 2022.
Challenges for IndiGo
As of January 15, out of those 302 aircraft, IndiGo has 20 aircraft that are currently grounded as a result of the airline’s financial difficulties. 12 engines have now been delivered to IndiGo.
IndiGo, is prioritising the wet-lease of six Boeing 777-300 (ER)s from Turkish Airlines and will initially put them into service before obtaining further deliveries of engines from P&W.
“IndiGo’s priority at the moment is to start operations of the Boeing 777 on the Delhi-Istanbul and Mumbai-Istanbul routes as soon as possible.”–An Aviation Insider
“While it is our immediate priority to deploy adequate capacity to serve our customers, we are actively engaged with our OEM partners to work on mitigation measures that should ensure the continuity of our network and operations.”–IndiGo Spokesperson
He continued by saying that IndiGo is working on a number of affordable countermeasures with their OEM (Original Equipment Manufacturer) partners in an effort to lessen the economic impact of AOG (Aircraft on Ground) as a result of this widespread disruption.
“Some of the other measures being evaluated include slowing down redeliveries through lease extensions, exploring the reinduction of aircraft into the fleet, and evaluating the wet lease options within the regulatory guidelines. We are bullish on the market opportunities and will continue to add flights in the existing and new markets.”–IndiGo Spokesperson
The parent company of low-cost carrier IndiGo, Interglobe Aviation, announced a financial loss of Rs. 1,583.33 crores on November 4 for the first half of the fiscal year 2022–23. The airline’s net loss climbed from the first quarter of the current fiscal year, when it was Rs 1,064.26 crore, to the second quarter of the current fiscal year, when it was Rs 1,435.65 crore.
Challenges for GoFirst
Since November, Go First has received 18 engines, and it will continue to do so gradually over the coming few months as it works to raise funds.
“Pratt & Whitney had provided 17 serviceable engines in December and we were able to make 8 aircraft serviceable. Similarly, we are expecting 20 more serviceable engines to be received by February – March 2023.”
“The airline has already made all payments due and has been paying as per the schedule.”–GoFirst Spokesperson
Additionally, he mentioned that GoFirst will receive eight new Airbus aircraft between January and June 2023, bringing its fleet total to 66.
Go First claimed in October that the repeated waves of Covid-19 that disrupted aviation travel and P&W’s delay in supplying engines caused its net loss to more than double to Rs 1,807,91 crore in 2021–22.
In 2020–21 and 2019–20, the company lost 870.48 crore rupees and 1,270.92 crore rupees, respectively.
The Wadia Group, who are the proprietors of GoFirst, said in December that they would inject Rs 510 crore into their airline to cover “working capital requirements” and for “general corporate purposes” through their Mauritius-based company Baymanco Investments.
In order to address its financial need in 2022–23 (FY23), Go First has applied for at least two loans totalling Rs 203.5 crore through the government’s Emergency Credit Line Guarantee Scheme (ECLGS).
IndiGo and GoFirst, both carriers were compelled to ground their aircraft due to delays in engine delivery brought on by significant supply chain disruptions. In contrast to Go First, which is had difficulties filling its capacity and keeping to its schedule, IndiGo has opted to lease planes in order to meet demand.
Airlines suffer significant financial losses due to Aircraft On Ground (AOG). We anticipate receiving engine deliveries soon, witnessing the aircraft soar into the skies, reduced ticket pricing and less commotion at airports during busy times.
Source: Money Control