India’s largest airline by market share, IndiGo, is facing fresh hurdles as it looks to expand.
Sector regulator, directorate general of civil aviation (DGCA), yesterday (Nov. 25) instructed the airline to gradually stop operating its older Airbus A320 and 321Neo aircraft with glitch-prone engines. The engines, supplied by US-based Pratt & Whitney, are prone to damage and can shut down mid-flight, according to DGCA.
“Every aircraft added to (IndiGo’s) existing fleet should lead to one of those with unmodified engines to be grounded and the new aircraft may be operated on the same schedule as was being operated by the grounded aircraft.”
A failure to do so will result in large-scale cancellation of flights from Jan. 31 due to grounded aircraft, the regulator warned. “We may find ourselves in a situation in which we remain saddled with a large number of aircraft with unmodified engines and operating on a schedule approved by us.”
IndiGo confirmed the latest development and said it is trying to fix the issue. “IndiGo is working with P&W and Airbus to… meet the DGCA guidelines,” it said in a statement, adding that its current schedule will remain “intact.”
IndiGo was one of the first Indian airlines to introduce the Airbus A320Neo to its fleet in 2016, and ever since, it has suffered multiple glitches both mid-air and on-ground. In the last year, IndiGo has witnessed 13 such incidents, including four just last month.
In an order on Nov. 1, DGCA had asked IndiGo to replace all older versions of P&W engines in its Airbus A320Neo aircraft with new ones, following a spate of recent inflight engine shutdowns that caused “serious concern.”
GoAir is the only other Indian carrier that has P&W engines in its A320Neo aircraft.
Turbulence ahead
The latest DGCA order may force IndiGo to go slow on its fast-paced expansion.
The airline has been ordering new aircraft and aggressively launching new routes. Last month, IndiGo placed an order for 300 Airbus A320Neo jets. However, it said that it is yet to decide on the choice of engine manufacturer—P&W or CFM, which is jointly owned by France’s Safran and US-based General Electric.
Besides engine troubles, the airline is also struggling to curb the high maintenance costs of its fleet, due to which it reported a massive loss of Rs1,062 crore ($150 million) in July-September. In a post-earnings conference call with analysts last month, the airline’s new finance chief, Aditya Pandey, said IndiGo had leased more than 50 of its old Airbus A320Neo planes, which were more expensive to maintain. He further added that maintenance costs will remain high in the ongoing quarter and the next.
“These will start decreasing only by 2022, once the A320Neos are replaced by incoming, upgraded A320Neo planes. Delivery of the neos has been delayed because of glitches in the P&W engines powering a chunk of the planes ordered by IndiGo,” Pandey had said.
The results came against the backdrop of an escalating tussle between IndiGo co-founders Rakesh Gangwal and Rahul Bhatia over corporate governance issues.
The tensions between the two are even driving away the potential investors. In a press conference in New Delhi this month, the CEO of Qatar Airways said the Gulf carrier wants to invest in the Indian airline but will wait for the ongoing feud between Gangwal and Bhatia to settle.