IndiGo's Strategy to Counteract Pratt & Whitney Engine Issues and Maintain Growth

IndiGo, India's largest airline, announced on Friday that it will lease new aircraft and extend leases on some older ones to counteract the disruption caused by new issues with Pratt & Whitney engines. Pratt & Whitney's parent company, RTX, revealed in July that a unique powder metal defect could cause some engine components in the twin-engine Airbus A320neo to crack, necessitating expedited inspections. 


These inspections are predicted to ground hundreds of Airbus jets between 2023 and 2026. In response, IndiGo is proactively taking steps to ensure its growth in India's thriving aviation market is supported. "Despite being informed of aircraft grounding, we are executing a mitigation plan and are confident of meeting our fiscal year 2024 capacity guidance due to strong demand," said Pieter Elbers, CEO of IndiGo, during a post-earnings call. 


IndiGo has kept 14 of its older Airbus A320ceo, extended leases on 36 other aircraft, and is leasing 11 additional aircraft starting in November. It is also leasing 12 more A320ceos from the secondary market starting in January, according to Gaurav Negi, IndiGo's CFO. With these measures, the airline is on track to expand its current fleet of 334 planes by "north of the mid-teens" this fiscal year and to double in size by 2030. 

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The company is currently negotiating with Pratt & Whitney for compensation over engine issues, with payments expected to be staggered. Currently, around 40 IndiGo planes are grounded due to previous issues with Pratt & Whitney engines, and the number of groundings due to new problems is yet to be determined.

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