IndiGo and Go Air cancelled around 70 flights on Tuesday as the two airlines grapple with aircraft grounding by aviation regulator Directorate General of Civil Aviation (DGCA). IndiGo cancelled around 50 flights, whereas Go Air cancelled 20 flights. The airlines said the affected passengers will be accommodated in other aircraft but there will be a change in their schedule.
The flights that have been cancelled are from Delhi, Mumbai, Chennai, Kolkata, Hyderabad, Bangalore, Patna, Srinagar, Bhubaneswar, Amritsar, Srinagar and Guwahati, among others, according to news agency PTI.
Yesterday, DGCA had grounded 11 planes (eight of IndiGo and three of Go Air) due to a recurring malfunction in their engines. The malfunction had occurred with certain sub-population of engines manufactured by Pratt and Whitney (PW). The problem stems from a component in the engine that can show early signs of wear and is located in an area that must withstand high pressure. Due to this, hundreds of passengers were stranded across the country yesterday.
A senior airline official explained that the grounding is taking a toll because the airlines have little scope in alteration of their network as they had taken the planes into consideration while making the schedule. “There will be cancellations till the start of new schedule on 25 March. We have a large network and multiple flights from one point to other, so we can accommodate the passengers in other planes. Necessary information is being shared with affected flyers,” a senior IndiGo official said.
PW said the issue will be resolved only by the end of June. “The corrective action has been approved and we have already begun to deliver production engines with the upgraded configuration.
We are working to mitigate the AOG situation by the end of the second quarter,” the engine manufacturer said in a statement.
Market analysts tracking the sector said the two airlines will face the pressure of grounding in near term as there will be a constraint in capacity addition. Analysts expect the disruption to have an impact on IndiGo’s finances as it will be forced to go for a short-term lease of old aircraft to maintain the target of capacity induction leading to higher expense. Short-term leases are costly and their maintenance costs are also higher as compared to new planes. Airbus has already stopped delivery of A320 neo model fitted with PW engines.
“The problem could become much bigger if the engine supplier cannot find a quick fix as the delivery schedule of future A320 neo aircraft can be affected,” said Ansuman Deb of ICICI Securities in a research report. IndiGo’s dependence on a short-term lease of old planes from secondary market has gone up significantly as the technical problems of the engines persist. In FY18, IndiGo has inducted 24 aircraft from secondary market as compared to 13 new planes.
Frequent engine failures led to grounding of the fleet for a prolonged period of time and also caused delays in aircraft deliveries for IndiGo. The older planes could result in slightly higher ownership costs though it is likely to be compensated by the suppliers. Given the lead times in such leases, any significant delays in inducting the A320 neo engines could force IndiGo to wait longer to recoup its lost market share,” SBI Caps wrote in a research report on 12 March. Slowdown in IndiGo’s capacity addition has caused its domestic market share to fall to 39.4 per cent in December 2017 against 40.4 per cent in November 2016.
IndiGo operates about 1,000 flights daily and carries about 40 per cent of domestic flyers, while GoAir has a market share of around 10 per cent.
