India’s largest airline, IndiGo, is making steady progress in resolving engine-related issues that have sidelined parts of its fleet. After enduring months of disruptions due to Pratt & Whitney (P&W) engine defects, IndiGo is now reporting a notable decline in the number of grounded aircraft. This marks a turning point for the airline as it works toward restoring full operational capacity.
IndiGo CEO Pieter Elbers highlighted this progress during a recent investor call, stating, "We have turned the corner as the number of grounded aircraft and associated costs have started reducing." As of September 30, IndiGo had 410 aircraft in its fleet, though over 70 were previously grounded due to engine-related challenges. The airline now expects this figure to drop to the “mid-forties” by early FY26, signaling a gradual return to stability.
Mitigation Strategies and Operational Stability
To address the shortage caused by grounded aircraft, IndiGo adopted temporary mitigation measures, including damp leasing, extending leases on existing planes, and delaying the retirement of older aircraft. These strategies, while essential for maintaining operations, came at a significant financial cost.
IndiGo CFO Gaurav Negi noted that the situation is improving, with the number of grounded planes decreasing to the “high sixties” and projected to drop below 60 by year-end. “The trajectory we were experiencing, where the AOGs [aircraft on ground] were increasing, has now taken a turn,” Negi stated, signaling optimism for the airline's recovery plan.
Financial Challenges Amid Rising Costs
The airline’s financial performance in the September quarter reflects the strain of these mitigation efforts. IndiGo reported a net loss of nearly Rs 1,000 crore, compared to a Rs 190 crore profit in the same period last year. This loss ended a streak of seven consecutive profitable quarters.
Rising costs, including a 13% year-on-year increase in fuel expenses to Rs 6,605 crore, were a major factor. Total costs rose by 22% year-on-year to Rs 18,666 crore, outpacing the airline's 14.6% revenue growth, which reached Rs 17,800 crore. Elbers acknowledged these challenges, describing the results as reflective of “headwinds related to groundings and fuel costs” during a seasonally weaker quarter.
Pratt & Whitney’s Role and Long-Term Solutions
The root of IndiGo’s operational challenges lies in defects identified by Pratt & Whitney in the powder metal used for its geared turbofan engines, which power many of IndiGo’s A320neo aircraft. The defect, discovered in 2023, has led to accelerated inspections and additional groundings globally.
IndiGo responded by introducing 31 new aircraft, nine of which were specifically acquired to address the impact of grounded planes. As these grounded planes reenter the fleet, IndiGo plans to phase out short-term leases, gradually reducing costs and financial strain.
Future Growth and Market Leadership
Despite recent setbacks, IndiGo remains optimistic about its growth prospects. The airline expects cost savings as grounded aircraft return to service and fuel prices stabilize. With robust demand for air travel in India, IndiGo is poised to capitalize on its market leadership position as operational efficiency improves.
Analysts predict a positive trajectory for the airline as it recovers from these challenges. The resolution of P&W’s engine issues and continued fleet recovery efforts are expected to secure IndiGo’s dominant position in India’s aviation sector, supporting its long-term growth and profitability.
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