An IndiGo Airlines A320 aircraft is parked on the tarmac at Bengaluru International Airport in Bangalore.
Credit: Reuters Photo
India’s largest airline by market share Indigo expects grounding of more aircraft in the fourth quarter (January-March) of the financial year 2024, its chief financial officer Gaurav Negi informed during an analyst call on Friday.
“These accelerated inspections and incremental shop visits will further adversely impact our operating fleet from Q4 onwards, and will lead to higher number of groundings,” he said, adding that the airline is awaiting more information from Pratt & Whitney.
Earlier this year, engine marker P&W said around 600-700 engines are likely to be affected as it detected a powder metal contamination that can lead to engine cracking. Currently, over 40 of the airline’s aircraft are grounded.
InterGlobe Aviation, the operator of IndiGo, reported a profit of Rs 188.9 crore for the quarter ended September 2023 compared to a net loss of Rs 1,583.3 crore in the same period a year ago, comfortably exceeding market expectations.
Its revenue from operations rose Rs 14,944 crore, up 19.6% from the year-ago period, on the back of a surge in domestic travel demand, which has been on an uptrend in the past three quarters and which offset a rise in expenses.
This is the fourth consecutive time the airline has posted profits, and the first time in five years that it reported profits in Q2, which is a seasonally the weakest quarter, according to analysts. It has also benefited from troubles at smaller rivals Go First and SpiceJet.
Indigo’s load factor stood at 83.4% at the end of the September quarter, up from 79.2% in the previous year.
However, high fuel costs (which rose to Rs 5,855 crore from Rs 5,228 crore) marred operating performance. The airline's Indigo’s yield per passenger fell 12.4% to Rs 4.44 in the September quarter from Rs 5.07 a year ago. Total expenses for the quarter ended September 2023 were Rs 15,313.8 million, an increase of 6.1% over the same quarter last year.
Owing to the engine troubles, Indigo has leased 11 additional aircraft which will start operating this month. It is also in the process of executing leases for 12 additional A320ceos from secondary markets, deliveries of which are expected from January 2024 onwards, Negi further informed.
In an attempt to diversify its sources of financing, Negi said the airline is in the process of setting up an aircraft leasing unit in GIFT City in Gujarat.