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IndiGo cancelled 37 of the over 1,000 flights that it operates across the country on Tuesday and expects to see about 30 flights being cancelled on Wednesday following the Directorate-General of Civil Aviation’s (DGCA) order asking the airline to ground 11 Airbus A-320 neos. The aircraft grounded are those fitted with faulty Pratt and Whitney 1100 engines manufactured with a particular serial number.
GoAir, which has also been asked to ground three Airbus A-320 neo aircraft, cancelled 18 flights originating from eight cities. GoAir operates over 200 flights daily.
Industry analysts point out that the impact of grounding of the IndiGo aircraft will be minimal although passengers will be inconvenienced as they might not be able to take the flight on which they were booked.
“IndiGo operates 17 daily flights on the Delhi-Mumbai route. If they were to cancel one or two of these flights, passengers booked on the cancelled flights will be accommodated on other flights,” an analyst said.
Sharat Dhall, COO-B2C, Yatra.com, felt that with domestic passenger load factors being over 90 per cent, the reduction in capacity could see domestic air fares increase by 5-10 per cent on key routes in the short to medium term. “We have seen fares of over ₹12,000 for a one-way Delhi-Mumbai flight for today,” he added .
Analysts are divided on the impact that the grounding of aircraft will have on IndiGo. Edelweiss has indicated that IndiGo may lose market share in the near term. “ Issues with P&W engines and delayed capacity addition plans have led to grounding of a few affected aircraft. This will hurt IndiGo in the near term and it may lose market share to domestic peers. P&W engine issues will take a while to get resolved,” Edelweiss said.
However, Kotak Institutional Equities said while additional grounding of aircraft is a negative, P&W’s latest announcement of a fix for these particular aircraft should boost supply of modified engines and should not lead to a material operational disruption. Further, revenue loss to IndiGo will be made good by P&W .
On Tuesday, IndiGo shares closed at ₹1302.60, almost 2 per cent higher over the previous close, on the BSE.
Meanwhile, the DGCA, in a statement on Tuesday said at present there are 45 A320 neo — 32 with IndiGo and 13 with GoAir — fitted with P&W 1100 engine. “As on date 14 320 neos with these operators fitted with engines beyond ESN 450 — 3 with both engines affected and 11 with one engine affected — have been grounded. The remaining 31 A320 neo with IndiGo and GoAir are fully operational and there is no safety issue with them,” the statement added.
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