INDIGO PLANS TO ADD 40 PLANES IN A YEAR

The decision of Airbus to halt the delivery of A320 planes is unlikely to affect low-cost major IndiGo’s expansion, because it plans to add around 40 planes in the next 12 months.

The plan includes leasing around 25 A320 ceo and getting 15 new ATRs.

“The issue will not affect IndiGo’s expansion plan much. The airline still will induct almost 40 planes in the next 12 months,” said a person aware of the airline’s plan.

“The airline will still grow by 20 per cent, which is double that of its rivals,” the person said. On Friday, Airbus told customers it was postponing all A320 neo deliveries till further notice after glitches in geared turbofan engines manufactured by Pratt & Whitney came to light.

“Pratt & Whitney, with the support of Airbus, is in close contact with customers to address the results of a recent finding related to the knife edge seal in the high-pressure compressor aft hub on the PW1100G-JM engine powering the A320neo. This issue is isolated to a limited subpopulation of engines,” the engine maker said in a statement.

Pratt further said it will give a plan for 2018 once the safety regulators address the current issue.

As a result of the warning, IndiGo had grounded three planes, which, it said, had engines of the same variant.

While the original plan was to add 60 planes, the current target is higher than that in the previous year.

However, its spending is likely to go up because it is going for a short-term lease due to high maintenance and ownership costs of older planes.

IndiGo added 24 planes in 2016-17 and 24 to date in 2017-18.

The airline last month had indicated a 24 per cent increase in capacity, implying that average growth in 2017-18 will be around 18 per cent. Analysts had expected growth to accelerate. After the previous technical glitch in the engines of A320 neo planes had been resolved, IndiGo had become aggressive in its induction plans. In the last quarter IndiGo added 12 aircraft, including eight A320 neo and three ATRs.

The airline also took four planes in a wet lease arrangement with Lithanian airline Small Planet. Experts said the slowdown was unlikely to have any major impact on the growth of the Indian market.

“The Indian market will continue to grow by around 15 per cent. The void, which A320 neo might create, will be filled with leases by IndiGo, along with aggressive induction by SpiceJet,” said Ameya Joshi, founder of aviation blog Network Thoughts.

SpiceJet is likely to add around 24 planes by December (15 Boeing 737 and nine Q400 Bombardier).