InterGlobe Aviation, the parent company of India's largest airline IndiGo, has announced that it will receive customized compensation from aircraft engine maker Pratt & Whitney's affiliate firm International Aero Engine (IAE) for grounded aircraft. This development comes as the airline continues to grapple with issues related to the availability of engines for its fleet.
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In a regulatory filing on June 14, 2024, InterGlobe Aviation stated, "On June 14, 2024, InterGlobe Aviation Ltd finalized an amendment to the existing agreement with International Aero Engines, LLC, an affiliate of Pratt & Whitney pursuant to which IAE will provide IndiGo with a customized compensation in relation to the ongoing situation of aircraft on the ground due to unavailability of engines."
The compensation agreement is a response to the significant number of IndiGo aircraft that have been grounded due to supply chain and engine issues. In February, the airline reported that the number of aircraft on the ground was in the mid-70s. The compensation is aimed at mitigating the impact of ongoing supply chain disruptions and engine shortages. The exact amount of the compensation was not disclosed by InterGlobe Aviation.
Pratt & Whitney, a unit of Raytheon Technologies, has been facing challenges with a rare powder metal defect that could lead to cracking of some engine components in the twin-engined Airbus A320neo. This issue has led to accelerated inspections and is expected to cause groundings of 600-700 Airbus jets between 2023 and 2026. IndiGo, which is the only profit-making domestic carrier in India, reported a profit after tax of Rs 1,894.8 crore in the March quarter of 2024. The airline's fleet stood at 367 planes at the end of March, including 13 on damp lease. The compensation from Pratt & Whitney is expected to help IndiGo address the challenges posed by the grounded aircraft and continue its operations effectively.