How Bad is IndiGo’s and GoFirst’s A320 Engine Problem?

How Bad is IndiGo’s and GoFirst’s A320 Engine Problem?

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.

Mumbai Airport sees heavy rush during Festive Season

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.

Why? A shortage of engines and spare components has forced the grounding of about 75 aircraft, largely belonging to IndiGo and Go First, making aircraft unavailable for flights. 

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. 

Last year, supply chain issues that delayed Pratt & Whitney’s supplies of aircraft engines forced both carriers to ground aircraft

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.

Also read: Pratt & Whitney top executives visit India to address engine supply chain issues

Challenges for IndiGo

As of January 6, IndiGo has a fleet size of 302 aircraft, comprising two A321Fs, 39 ATRs, 155 A320neos, 77 A321neos, and 29 A320ceos.

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. 

As of January 15, IndiGo has 20 aircraft that are currently grounded

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.

Also read: DGCA allows IndiGo to wet lease Turkish Airlines planes

“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

Also read: Relief for IndiGo as Indian carriers can now wet lease wide-body aircraft for a year

Six Boeing 777-300(ER)s from Turkish Airlines are being wet-leased by IndiGo as a priority, and the airline plans to use them first before receiving more engine deliveries from P&W

“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

Losses 

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

Go First possesses 58 Airbus A320 vehicles as of January 6, including 53 A320neos and 5 A320ceos. As of January 15, 8 of these 58 A320s are grounded.

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.

As of January 15, 8 of the Go First’s A320s are grounded

“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.

Losses

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.

GO-FIRST Airbus A320
The Wadia Group have injected Rs 510 crore into their airline to cover “working capital requirements” and for “general corporate purposes”

Also read: Wadia Group to infuse Rs. 510 crores in Go First for its working capital needs

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).

Conclusion

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

Responses

Feed
Jobs
News
Magazine