One of India’s largest airlines IndiGo said that nearly 30 aircraft have been grounded due to “supply chain disruptions” on Monday, November 7. The airline is evaluating the wet leasing of planes and other options to boost operations. In a ‘wet lease’ arrangement, the lessor maintains operational control of flights while providing aircraft and crew.
The carrier, which is the world’s seventh largest in terms of daily departures, had 279 aircraft in its fleet. It operates more than 1,600 daily flights and currently flies to 100 destinations, including 26 international ones. 30 planes of IndiGo are grounded due to supply chain problems, reported PTI citing sources.
A wet lease is a leasing arrangement whereby one airline (the lessor) provides an aircraft, complete crew, maintenance, and insurance (ACMI) to another airline, which pays by hours operated.
Last month, IndiGo’s request for wet leasing Boeing planes from Turkish Airlines for up to two years was cancelled by the aviation regulator DGCA. The regulator, however, allowed IndiGo to wet lease the planes for up to six months.
When contacted, an IndiGo spokesperson on Monday, November 7 confirmed to PTI that around 30 aircraft are on the ground. The spokesperson said that globally, the aviation industry continues to face significant supply chain disruptions.
“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. As we work on various cost-efficient countermeasures with our OEM partners, the endeavour is to minimise the economic impact of around 30 AOG (Aircraft on Ground), resulting from this global disruption.”Spokesperson, IndiGo
The airline is looking at 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 existing and new markets,” the airline said. The carrier has a domestic market share of more than 57%.
On November 1, aviation consultancy firm CAPA said that more than 75 planes of Indian carriers are currently grounded due to maintenance and engine-related issues. These planes, which account for around 10-12 % of the Indian fleet, are grounded due to maintenance or engine-related issues. “These will have a significant impact on financials in the second half,” CAPA said in its India Mid-Year Outlook 2023.
During an earnings call with analysts on November 4, IndiGo CEO Pieter Elbers said supply chain disruption in aircraft manufacturing and subsequent shortage of spare engines worldwide have impacted the airline’s operations due to the grounding of aircraft. “The challenges are forcing us to look at different ways and means to make sure that we can operate,” he had said.
In the September quarter, IndiGo’s parent InterGlobe Aviation reported a widening loss to INR 1,583.34 crore due to higher fuel costs and foreign exchange loss.
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Grounding of aircraft also comes at a time when competition in the skies is expected to heat up as the Tata Group-run Air India has started to realign its airline business and has set an ambitious target to achieve a 30% share in the domestic as well as international (to and from India) market over the next five years.
Go First facing the same issues as IndiGo
IndiGo is planning to extend the lease of in-service planes and induct new aircraft on the wet lease because supply-chain disruption has forced the grounding of 30 Airbus A320 planes.
Go First, which is facing a similar issue, has increased the utilisation of its operational aircraft to cover up the grounding of its Airbus planes. Go First is operating fewer flights than it did last winter and is trying to maintain the schedule it filed by increasing aircraft utilisation.
IndiGo, the country’s largest airline, operates a fleet of around 280 planes, which include Airbus A320 (CEO/NEO), A321 and ATR-72 aircraft. IndiGo and Go First’s Airbus fleet is powered by Pratt & Whitney and CFM engines.
Go First has 58 Airbus A320 (CEO/NEO) planes in its fleet and is operating 30-32 of them. A source in Go First said the airline was expecting up to 16 engines from Pratt & Whitney this month.