IndiGo will also look at GE engines for its planned 280 A320 neo planes, its President Aditya Ghosh said today amid the airline grounding some of its neo fleet due to the Pratt & Whitney engine issues. Addressing shareholders at the annual general meeting in New Delhi, he also said the airline expects to have 20 turbo prop aircraft by January 2019.
As part of ambitious expansion plans, IndiGo is keen on opportunities in the regional aviation market as well as low cost long haul international flights. The no-frills airline, which has the largest share in the domestic aviation market, has placed orders with Airbus for 430 neo (new engine option) aircraft, which burn less fuel. Ghosh, who is also a Whole Time Director, said the issues related to its A320 neos are due to two specific components of P&W engines wearing out faster than expected even as he assured it is not a safety issue.
“Our engine supplier P&W is implementing some design changes and we believe those changes will be implemented over the next 12-18 months… We are right now focused on getting enough spare engines from P&W so that the operational headaches go away,” he told shareholders.
Currently, IndiGo has 23 A320 neo planes. About the possibility of GE engines being used for A320 neo planes, Ghosh said the airline still has to make a choice for the engines for 280 neos beyond the first 150 aircraft. “We will absolutely keep watching it (GE engines)… We will absolutely keep looking at what is out there in the market place,” he noted.
He acknowledged that IndiGo expects delay in delivery of some of the A320 neos, “which is why we have also reduced the capacity guidance for the year from 25 per cent to 20 per cent”. Right now the focus is on making sure that there are enough spare engines, Ghosh said even as he made it clear that the airline has chosen the right engine since it is delivering up to 15 per cent lower fuel burn.
“If you don’t have enough spare engines, then the planes are sitting on the ground and you are waiting and that leads to some flight cancellations… What we do is we try and anticipate as much as possible in advance and do pre-planned cancellations so that our customers are less inconvenienced,” he said.
In recent times, IndiGo has grounded eight A320 neo aircraft due to engine issues that has also resulted in cancellation of flights. Ghosh said the planned turbo prop operations would enable it to provide connectivity to under-served areas. IndiGo expects to have 20 turbo prop planes by January 2019, Ghosh said and asserted that it does not have any shortage of pilots.
“The ATR foray is a new and exciting project for us. We expect to get 20 ATRs by January 2019… We have opened up the opportunities for current A320 pilots and if anyone wants to fly, they are more than welcome provided they meet the eligibility criteria,” Ghosh said.
In May, IndiGo announced plans to buy 50 ATR turbo-prop planes worth USD 1.3 billion as part of efforts to tap the regional aviation market. With regard to plans for low cost long haul overseas flights, Ghosh told shareholders today that it would “pursue both organic and inorganic opportunities”.
“We believe there is a significant opportunity that exists to traffic from high cost non-stop operators with right kind of low-cost non-stop services out of India. We are uniquely positioned to take advantage of this, primarily because of our significant domestic network,” he said.
About the airline’s interest in Air India, Ghosh said the specific interest is in acquiring international operations. “We will wait to see how the government will undertake this divestment of Air India and till such time that clarity is available, it does not help to speculate on all different scenarios that are possible,” he said.
Soon after the Cabinet gave its in-principle nod for Air India divestment in late June, IndiGo had expressed interest to buy the latter’s international operations as well as Air India Express. “We are not going away from the sale and lease back model. We will probably continue to rely more on sale and lease back model for new deliveries but we will start to own some aircraft going forward,” IndiGo’s Chief Financial Officer Rohit Philip said.