IndiGo to reduce its grounded fleet by summer

India’s largest airline, IndiGo, is expected to reduce its aircraft-on-ground (ago) fleet from the 70s last summer to the 40s this summer. Riddled with engine glitches, IndiGo has seen many Pratt and Whitney-enabled Airbus A320neo planes grounded for long periods. Some of these are grounded due to a powder metal defect that led to the cracking of engine components, while others had to be grounded due to other engine challenges. Because of these anomalies, an estimated 700 Airbus planes worldwide are expected to be grounded from 2023 to 2026. “We are past the peak of groundings and the groundings are on a downward trajectory in the sixties currently. Based on the latest guidance from OEMs, we will begin the next financial year with the groundings in the range of 40s and expect the number to further go down as the year progresses,” Gaurav Negi, the airline’s CFO, told analysts on Friday. IndiGo said it inducted 33 aircraft during this December quarter. Of these, 23 were from the original order book, eight were via damp lease, and two were from secondary leases. It also redelivered six aircraft, resulting in a net addition of 27, bringing the fleet size to 437. Most of the planes that are being redelivered are with Pratt and Whitney engines. Adding wet-leased planes has increased the airline's cost and helped it maintain capacity guidance. For example, its ASKs grew 12% in the December quarter compared with last year's, and despite these engine challenges, the airline expects around 20% ASK growth for the ongoing quarter. IndiGo and Air India account for most of the 1,700 planes on order from India. Strong demand is leading to the addition of nearly 190 planes to the Indian fleet in the current fiscal year and another 120 in the next fiscal year. India's domestic air passenger traffic grew by 6.12% in 2024, reaching 161.3 million passengers, according to data from the Directorate General of Civil Aviation (DGCA) released last week. IndiGo flew almost 100 million (99.9 million) of these 161.3 million passengers, while the Air India Group, comprising Air India, Air India Express, and Vistara, carried 45.8 million passengers, up from 39.49 million in 2023. Demand has remained resilient despite a slowing economy. IndiGo management, in its analyst call, said load factors stayed above 90% for most of November and December.

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