IndiGo, India's largest airline, plans to lease as many as 20 aircraft from April to partly make up for capacity lost due to the grounding of over 70 planes in its fleet, people aware of the discussions told Moneycontrol.
"IndiGo is in talks with multiple leasing companies and airlines to add to its fleet before the summer schedule begins in April. The airline is in the final stage of negotiations to onboard eight aircraft on wet lease from airlines and another 12 from the secondary market," a senior executive said.
Until December, IndiGo was looking to onboard mainly Airbus planes because most of its pilots were certified to fly the European company’s aircraft. However, the airline reconsidered its options and now plans to onboard Boeing aircraft as well, the executive said.
IndiGo is expected to onboard five Boeing 737 Max aircraft from Qatar Airways and three Boeing 737 Max planes from Ryanair by April, people told Moneycontrol.
India's biggest carrier by domestic market share and fleet size said on February 2 that it has over 70 aircraft grounded compared with over 40 at the start of October 2023. These include aircraft waiting for parts due to supply-chain challenges or undergoing inspections after Pratt & Whitney recalled hundreds of PW1100G engines.
"The secondary market for Airbus planes with CFM engines is shrinking and the airline is eager to add to its fleet," a senior executive from a major leasing company said. The executive added that IndiGo is looking to add planes on wet lease for six months and through short-term leases in the secondary market.
Committed to higher capacity
A damp or wet lease is an arrangement under which the lessor provides an aircraft with cockpit crew and maintenance and it is costlier than a normal lease.
Last week, IndiGo signed a finance lease transaction for four new Airbus A320neo aircraft with BOC Aviation. These new aircraft will be powered by CFM LEAP-1A engines and are scheduled for delivery in 2024.
"As the demand for air travel continues to soar, we at IndiGo are committed to expanding our capacity and meeting the needs of our passengers. In the past few quarters alone, we have increased our capacity by 25 percent. As of December end, we have a total of over 350 planes in our fleet," IndiGo's Chief Financial Officer Gaurav Negi said in response to questions for this story.
Negi said that to expand capacity, IndiGo retained 14 of its older Airbus A320ceo planes, extended leases on 36 other aircraft, took 11 additional aircraft on damp lease in November, and had earlier two damp-leased wide-body aircraft operating on the Istanbul route.
"Additionally, we are looking for some more capacity from the secondary market. This strategic move will help us optimise our network and capitalise on new opportunities," Negi said.
He said IndiGo is continuously adding planes to its fleet, with almost one plane arriving each week.
"We are confident that our efforts to expand our fleet will enable us to continue providing reliable and hassle-free service," Negi said.
Supply and maintenance issues associated with the PW1100 engines have dogged the carrier’s A320neo fleet as the airline implements an aggressive network expansion.
As of December 31, IndiGo had a fleet of 358 aircraft, comprising 312 Airbus A320 family planes, 44 ATR aircraft, and two B777 planes. The two B777s are currently under a wet lease agreement with Turkish Airlines.
“We are working with P&W on spare engine availability and are hopeful that the situation will start to improve in a few quarters,” Negi said while announcing the company’s third-quarter results.
IndiGo said it will increase its fleet by 20 percent in FY24, exceeding the 12 percent estimate given at the start of the current financial year.
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