The issues related to the engines supplied by Pratt & Whitney will affect some of the aircraft of IndiGo, said Gaurav Negi, the airline's chief financial officer, while addressing a post-earnings conference call on August 2.
"P&W's engine issues will affect some of our aircraft as well," Negi said while speaking in the airline's post-earnings conference call on August 2.
The airline's top management added that initially, it expects a "single-digit number of IndiGo's aircraft" to be impacted by the snag.
P&W will carry out engine repairs in a phased manner, the airline added, further noting that it is working with the US-based aerospace company to "access the full impact of the new engine issues".
Presently, 40 aircraft of IndiGo are grounded, with a majority of them being affected by supply chain issues. A number of the planes have been affected due to the earlier issues involving the P&W engines, which were blamed by GoFirst for the temporary suspension of its services in May.
Despite the grounded aircraft, IndiGo is confident of meeting its capacity growth guidance, the airline's management stressed during the conference call. The carrier logged its highest-ever quarter profit of Rs 3,090 crore in Q1FY24, whereas, the revenue climbed by 29 percent on-year to Rs 16,683 crore.
Negi added that IndiGo has also applied for regulatory approval to start a venture capital arm of IndiGo to invest in travel-related businesses.
"We are looking to start a venture capital firm for investments into startups operating in aviation, consumer and allied sectors such as travel & lifestyle, hospitality, and transportation," Negi said.
He added that the venture capital firm will have an initial fund of Rs 7 crore.
Negi also said that IndiGo has seen a larger-than-expected fall in yield in the second quarter of 2023-24 when compared to the first quarter of 2023-24.
He added that the airline had anticipated a 10 percent fall in yields between Q1 and Q2 due to the seasonality of travel in India, but yields in Q2 have fallen in the teens due to lower demand in the second quarter.
"Some festivals have shifted to Q1 from Q2 in 2023 due to which demand has fallen more than expected which has had an impact on yields," Negi said.
Negi also said that it has become harder to predict yields as customer booking partners have still not returned to pre-pandemic patterns. He added that IndiGo is still seeing customers book tickets closer to the date of travel when compared to pre-pandemic levels.
IndiGo's management also said that it is looking to launch a loyalty program soon and will be announcing details on the same in the future.
IndiGo's CEO Pieter Elbers reiterated that the airline is well on course to expand its international operations and is confident of meeting its target to make 30 percent of its revenues from the international market in 2023-24.
Elbers also said that IndiGo is confident of meeting its target of mid-teen growth in 2023-24.
P&W's latest snag, revealed on August 1, will impact at least 1,200 of its Geared Turbofan (GTF) engines that power Airbus' popular A320neo jets and will need up to 60 days to inspect and fix after microscopic contaminants were found in a metal used in part of the engine core.
While few airlines commented publicly about the engine contamination issue, multiple senior airline executives privately told news agency Reuters that they were shocked, and one who asked not to be identified called it a "nasty surprise."
Carriers are already grappling with shortages of pilots, air traffic controllers and new planes, making it harder to add more flights. Some are leaning on bigger planes that can accommodate more passengers to get around operational challenges.
With Reuters inputs
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