IndiGo, GoFirst planes still grounded despite advance talks with P&W

The Pratt & Whitney air-cooled radial engine of U.S. aviator Amelia Earhardt's Lockheed 5B Vega aircraft is seen at the Smithsonian National Air and Space Museum in Washington September 1, 2015. REUTERS/Gary Cameron - WASEB91179P01

IndiGo and Go First have 20 and eight planes grounded as of January 15, respectively, as the airlines struggle to pay for deliveries of engines, people aware of the situation told Moneycontrol.

Both airlines grounded planes last year on account of supply chain disruptions, which delayed deliveries of aircraft engines by Pratt & Whitney. However, the US engine manufacturer is now ready to deliver.

“Pratt & Whitney are keen to supply engines as soon as possible, but airline are delaying taking deliveries due to payment issues,” a person familiar with the matter said.

Go First took deliveries of 18 engines since November, while IndiGo has taken delivery of 12 engines, a second official aware of the matter said. He added that Go First will slow taking deliveries in the next couple of months as it looks to raise funds.

IndiGo, India’s largest airline, is prioritising the wet-lease of six Boeing 777-300 (ER)s from Turkish Airlines and will first put them into operation before taking deliveries of engines from P&W.

“IndiGo’s priority at the moment is to start operations of the Boeing 777 on the Delhi-Istanbul and Mumbai-Istanbul routes as soon as possible,” an aviation insider said.

P&W did not respond to queries sent by Moneycontrol.

"Pratt & Whitney had provided 17 serviceable engines in December and we were able to make 8 aircraft serviceable. Similarly, we are expecting 20 more serviceable engines to be received by February - March 2023," a GoFirst spokesperson said in a statement.

He added that Pratt & Whitney is still dealing with its supply chain issues and though there is improvement the complete resolution may take time.

"The airline has already made all payments due and has been paying as per the schedule," the GoFirst spokesperson added.

He also said that GoFirst is in the process of taking delivery of eight new aircraft from Airbus from January to June 2023 which will take the airline's fleet to 66.

Similarly, an IndiGo spokesperson said that the aviation industry globally continues to face significant supply chain disruptions.

"While it is our immediate priority to deploy adequate capacity to serve our customers, we are actively engaged with our OEM partners to work on mitigation measures that should ensure the continuity of our network and operations," the IndiGo spokesperson said.

He added that as IndiGo works on various cost-efficient countermeasures with our OEM partners, the endeavor is to minimise the economic impact of AOG, resulting from this global disruption.

"Some of the other measures being evaluated include slowing down redeliveries through lease extensions, exploring the reinduction of aircraft into the fleet, and evaluating the wet lease options within the regulatory guidelines. We are bullish on the market opportunities and will continue to add flights in existing and new market," the IndiGo spokesperson added.

Airlines in India have been struggling with funds since the outbreak of the COVID-19 pandemic due to high aviation turbine fuel prices.

Interglobe Aviation, the parent firm of low-cost carrier IndiGo, on November 4 reported a net loss of Rs 1,583.33 crore in the second quarter of the fiscal year 2022-23.

The airline's net loss in Q2 FY23 increased as against Q2 FY22 when it stood at Rs 1,435.65 crore and has significantly widened as compared to the first quarter of the current fiscal when it came in at Rs 1,064.26 crore.

Similarly, In October, Go First had said its net loss more than doubled to Rs 1,807.91 crore in 2021-22 due to P&W’s delay in supplying engines and multiple waves of Covid-19 that affected air travel.

The company incurred losses of Rs 870.48 crore and Rs 1,270.92 crore in 2020-21 and 2019-20, respectively.

GoFirst's promoters the Wadia Group, through their Mauritius-based entity Baymanco Investments, in December said it will infuse Rs 510 crore into its airline to meet its “working capital requirements” and for “general corporate purposes.

In 2022-23 (FY23), Go First has taken at least two loans worth Rs 203.5 crore under the government’s Emergency Credit Line Guarantee Scheme to deal with its cash crunch.

P&W is keen to clear its backlog of engine deliveries by the end of the current financial year, senior officials close to the engine maker said.

More than 50 aircraft of Go First and IndiGo had been grounded due to a lack of engines and spare parts in November. P&W provides engines to about 200 Airbus A320neo aircraft flown by Go First and IndiGo.

Its engines also power turboprop aircraft such as the ATR-72 and Bombardier Q-400 flown by Alliance Air, IndiGo, and SpiceJet.

Both airlines had to ground their aircraft due to delays in engine deliveries on account of significant supply chain disruptions, according to reports in November. IndiGo has gone down the leasing route to meet demand, while Go First is struggling to meet capacity and maintain its schedule.

In November, senior P&W executives including president Shane Eddy and Rick Deurloo, president of the company’s commercial engines division, met top officials of Go First and IndiGo to discuss ways to resolve engine supply issues in India. The executives said P&W is working aggressively to address the supply chain disruption and would be in much better shape by the end of 2022.

P&W, General Electric and Rolls-Royce are the top producers of aircraft engines. Aircraft makers offer different engine options for their planes and airlines choose which engines to go with.

IndiGo had a fleet of 302 aircraft as of January 6, including 155 A320neos, 77 A321neos, 29 A320ceos, two A321Fs and 39 ATRs. Go First has 58 Airbus A320 aircraft, including 53 A320neos and 5 A320ceos.