BOC Aviation delivers first of four Airbus A321NEO aircraft to Indigo

 BOC Aviation Limited has delivered the first of four new Airbus A321NEO aircraft on lease to IndiGo, an official statement said Monday.

The aircraft will be powered by CFM Leap engines, the BOC Aviation in a release said.

"We are very pleased to deliver the first of four new Airbus A321NEO aircraft on lease to IndiGo, India's largest passenger airline, and we're pleased to have an opportunity to build on our relationship with IndiGo, said Robert Martin, Managing Director and Chief Executive Officer, BOC Aviation.

"This incremental capital expenditure for larger narrow-body new technology aircraft continues to reflect our disciplined investment in popular and in-demand aircraft, as we work closely with industry-leading airlines such as IndiGo, to provide more fuel-efficient and technologically advanced aircraft solutions, he said.

Coronavirus: IndiGo grounds planes, cuts salary by 10-20% as revenue drops

India's largest carrier IndiGo has grounded about 16 planes out of its total fleet of 260 aircraft and is asking the employees to take 10 to 20 per cent salary cuts as it grapples with the impact of coronavirus on domestic and international flights.

"Governments across the globe have issued travel advisories which have resulted in a virtual shutdown of all our international flights," said an airline official on Thursday.

"Domestic bookings too are down around 20 per cent and it is not clear that the situation will not get worse before it gets better. With the precipitous drop in revenues, the very survival of airline industry is at stake," said the official.

"We know how hard it is for families to take a cut in take-home pay. But unfortunately, it is impossible for our company to fly through this economic storm without all of us making some sacrifice," the official added.

A week earlier, IndiGo said in regulatory filings that its quarterly earnings will take a hit as daily bookings decline by 15 to 20 per cent with coronavirus spreading across the world.

"In addition, the rupee has also depreciated sharply which will have an adverse impact on our dollar-denominated liabilities primarily on account of capitalised operating leases," it said.

At the end of December 2019, IndiGo had a fleet of 257 aircraft, of which 126 were A320ceo, 96 A320neo and 10 A321neo besides 25 ATRs.

The International Air Transport Association (IATA) has said the global air transport industry could see 113 billion dollars of revenue losses for the passenger business in 2020 as novel coronavirus snowballs into a public health emergency.

According to aviation consultancy firm CAPA, Indian carriers may initially ground around 150 aircraft, and the number is expected to grow as more domestic operations are curtailed over the coming weeks.

Indian aviation has a fleet base of about 682 aircraft with another 790 aircraft on order. The grounding of 150 aircraft will translate into 22 per cent of the capacity going out of the market.

IndiGo currently has nearly 48 per cent share in the domestic aviation market and nearly 11 per cent in the international traffic to and from India.

Earlier on Thursday, the Association of Asia Pacific Airlines (AAPA) said Asian airlines are facing revenue shortfalls of over 60 billion dollars this year as a result of sharp falls in demand which have already forced the grounding of over half the fleet.

By the same token, it said, many of the one million workers are unable to work because of drastic reductions in operations due to COVID-19 pandemic.

IndiGo denies undisclosed related party transactions, answers Sebi queries

IndiGo on Wednesday said it has responded to all queries from markets regulator Sebi regarding related party transactions and asserted that they were entered into in the best interests of the company.

InterGlobe Aviation, parent of the country's largest airline IndiGo, also said it has strong processes for ensuring arm's length dealings with related parties.

On Tuesday, sources told PTI that a preliminary probe by Sebi has suggested prima-facie violations of corporate governance and listing disclosure norms in certain related party transactions involving InterGlobe Aviation.

In a statement, IndiGo Whole Time Director and CEO Ronojoy Dutta said it has not received any communication from Sebi regarding any outcome of any preliminary enquiry by the regulator.

"Further, IndiGo strongly denies any allegations of wrongdoing or avoidance of processes. It reiterates that it has strong processes for ensuring arm's length dealings with related parties and that such transactions were entered into in the ordinary course of business and were in the best interests of IndiGo," he said.

According to him, IndiGo has responded to all queries from Sebi regarding these matters and remains confident that its position would be accepted.

"If and when Sebi conveys to IndiGo any outcome of an enquiry, IndiGo being confident of its compliance record, will deal with it appropriately," he added.

IndiGo has been facing a probe by the Securities and Exchange Board of India (Sebi) ever since a public spat came to light between two founders of the airline, including over certain related party transactions involving one of the warring promoters.

The watchdog has been conducting a thorough probe into the IndiGo matter. All agreements between the two warring founders as well as those between the company and its various investors and associates, including related parties, are being looked into by the regulator.

The probe has suggested that some of the related party transactions could have been significant and required detailed disclosures and greater vetting by board committees comprising of independent directors, the sources had said.

The differences between co-founders and co-promoters -- Rakesh Gangwal and Rahul Bhatia -- came to the fore in July 2019 after Gangwal sought market regulator Sebi's intervention to address alleged corporate governance lapses at the company. Bhatia has denied any wrongdoing.

In the wake of the feud, arbitration proceedings are also going overseas between the two promoters' sides.

Rakesh Gangwal (RG) Group and related entities together hold 36.64 per cent stake while Bhatia and affiliates -- InterGlobe Enterprises (IGE) Group -- have around 38 per cent shareholding in the company.

Last month, InterGlobe Aviation's shareholders rejected a proposal of Rakesh Gangwal to amend the company's Articles of Association (AoA). Generally, an AoA provides the regulations for operating a company.

After falling nearly 2 per cent during the day, shares of IndiGo managed to recoup the loss and closed with a gain of over 1 per cent on Wednesday.

On the BSE, the scrip declined 1.74 per cent to Rs 1,352.65 in early trade and later settle 1.49 per cent higher at Rs 1,397.25.

IndiGo in talks with Qantas and Jetstar Airways for codeshare partnership

IndiGo is in talks with Sydney-based Qantas Airways and its wholly owned subsidiary Jetstar Airways on codeshare agreements, which allows an airline to sell other airline's seats, officials said.

Currently, IndiGo has a two-way codeshare agreement with TurkishAirlines and a one-way codeshare partnership with Qatar Airways.

In a two-way codeshare agreement, each airline on its distribution system can sell seats on other's flights.

"IndiGo is currently in talks with Qantas Airways and Jetstar Airways regarding codeshare partnerships. With Qantas, it is likely to be one-way but with Jetstar, it is likely to be a two-way codeshare agreement," said an IndiGo official privy to the development.

The official added that IndiGo's relationship with Qantas may be similar to that of Qatar Airways where it can sell 20 seats on each IndiGo flight connecting Doha with Delhi, Mumbai and Hyderabad.

"These 20 seats on each IndiGo flight are blocked for Qatar Airways. It means, as IndiGo operates two daily return flights on Delhi-Doha, Mumbai-Doha and Hyderabad-Doha route, total 240 seats are blocked daily for Qatar Airways' passengers," the official added.

In November last year, Qatar Airways had signed a one-way codeshare agreement with IndiGo that allows its passengers to book seats on the latter's flights connecting Doha with the three Indian cities.

A second IndiGo official stated that the partnership with Melbourne-based Jetstar would likely be a two-way codeshare agreement, similar to the one it has with Turkish Airlines.

In response to queries sent by PTI, Qantas Airways and Jetstar Airways said in a joint response,"We regularly explore new partnership opportunities to offer our customers more seamless travel experiences, but we currently have no updates to share."

With around 47 per cent share in domestic air passenger market, India's largest airline has been focusing on international traffic for further growth.

In 2019, the low-cost carrier started operating flights between India and Singapore, Vietnam, Myanmar, China and Saudi Arabia.

In October 2018, IndiGo had signed two-way codeshare agreement with Turkish Airlines allowing either of the airlines to book seats for its passengers on each other's flight.

Bilateral flying rights between India and Turkey allow each country's airline to fly 14 flights per week to another country. As IndiGo already flies two daily flights to Istanbul, there is no scope to start additional flights to Turkey.

"Our codeshare partnership with Turkish Airlines has been extremely fruitful," said the second IndiGo official.

However, as bilateral relationship between India and Turkey have nosedivedin the last few months due to the latter's multiple statements against India on the Kashmir issue, IndiGo does not expect increase in flying rights with Turkey.

IndiGo announces four-day special Valentine sale, fares starting at Rs 999

Low cost carrier IndiGo on Tuesday announced a four-day special Valentine sale on travel across its network within India with all-inclusive fares starting at Rs 999.

The airline is offering one million seats on discounted fares from February 11 to February 14. The sale is valid for travel from March 1 to September 30, a company statement said.

"We are delighted to announce the four-day special sale effective from today till February 14, kickstarting the Valentine's celebrations a little early," the chief commercial officer of IndiGo, William Boulter, said.

Both corporate and leisure customers who wish to plan their travel can book tickets via the official website, the statement added.

Shareholders reject Rakesh Gangwal's special resolution at IndiGo's EGM

The special resolution proposed by IndiGo co-promoter Rakesh Gangwal was defeated in the company’s action-packed Extraordinary General Meeting (EGM) on Wednesday.

The resolution has not been passed as only 48.56 per cent of the votes cast were in its favour, while 51.44 per cent were against, according to an exchange filing. The resolution required support from at least 75 per cent shareholders.

But with Rahul Bhatia’s Interglobe Enterpise voting against it, the resolution failed. The Bhatia family and Inter-Globe Enterprises (IGE) together own 38.23 per cent, while Gangwal, his wife Sobha Gangwal and a trust hold 36.65 per cent.

Even most of the public institutions voted against the resolution. Of the 84 per cent of such large public shareholders who voted, 51.65 per cent rejected the move. Institutions own nearly 21 per cent stake in InterGlobe Aviation.

Queries on voting results sent to Gangwal didn’t elicit any response till press time. He stays in the US and didn’t attend the EGM.

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The resolution, proposed by co-promoter Rakesh Gangwal, sought to relax rules on the sale and purchase of shares by its main shareholders making it easier for the promoters to raise or cut stake in the company. Among the 16 clauses that Gangwal intended to remove are restrictions that confer the right of first refusal on the partner who’s prepared to stay on in the event of a stake sale by the other partner.

That clause prevents either of the co-founders from buying publicly-listed shares of the company, potentially triggering an open offer for the rest of the company and another one that prevents staggered sale by a partner.

To be clear, promoters’ right to board seats and their nomination rights are not linked to shareholding and will continue even if their stake falls below 50 per cent. So, Bhatia’s IGE group continues to retain the right to nominate the chairman, the CEO & MD, and the president.

It also has the right to appoint five out of 10 directors in the board. Two days ago, the company appointed CEO Ronojoy Dutta- an IGE appointee--as a whole time director on the board.

The Gangwal family had pointed out in its notice that EGM was necessary to remove the restrictive clauses of share transfer, that were part of shareholders’ agreement (SHA).

The clauses remain embedded in the Article of Association (AoA) despite the expiry of the SHA. The SHA, signed between Bhatia and Gangwal according to the conditions, expired last November-- four years after the listing of the company in 2015.

There was much drama at the EGM over the absence of Gangwal, who had called the meeting. Worried that the value of their shares was getting eroded as a result of infighting between the two co-promoters and with little clarity on what the new resolution would mean, shareholders raised alarm resulting in chaotic scenes. While Chairman M Damodaran called for peace, investors refused to pay heed.

“There is no requirement of changing any articles of the company when everything is going so good. We have got dividends from the company. Don’t want anything to change,” said a shareholder Anil Saxena, who travelled from Pune.

“We are all grown up people and I request you to please sit down,” Damodaran kept requesting as he tried to clarify that the resolution coming to vote doesn’t mean a promoter is quitting the company. In the midst of the pandemonium, Damodaran was heard saying that ‘’nobody's shareholding is going away’’ and that ‘’shareholders have a right to decide what to do with their shares’’.

IndiGo’s stock has been under pressure, falling close to 30 per cent since the feud broke out. But it has regained close to 10 per cent in the year-to-date period.

IndiGo Q3 preview: PBT may rise 48% YoY, commentary on A320neo engines eyed

Lower net fleet additions, higher fuel costs, and persisting issues with A320 neo engines could mar InterGlobe Aviation’s – parent company of budget carrier IndiGo – December quarter results for the financial year 2019-20 (Q3FY20).

The budget carrier, which is slated to report its Q3FY20 earnings later today, is also scheduled to hold an extraordinary general meeting (EGM) on January 29, likely on exit norms proposed by co-promoter Rakesh Gangwal.

As per a Business Standard report, the resolutions seek to “relax rules on the sale and purchase of shares by its main shareholders, making it easier for the promoters to raise or cut stake in the company”. READ HERE

The move, if cleared by the Board, has the potential to generate more funds for the airline and “open the doors for strategic investment in the company”, analysts say.

At 11:45 am, the stock of the low cost carrier (LCC) was trading 0.41 per cent higher at Rs 1,507 apiece on the BSE in an otherwise weak market. In comparison, the S&P BSE Sensex was down 0.4 per cent at 41,444 level.

During the December quarter of FY19, the airline had posted a profit of Rs 191 crore, but had posted its biggest ever quarterly loss of Rs 1,065.6 crore during the September quarter of Fy20 (Q2FY20). During December, IndiGo maintained its lead position with 47.5 per cent share of the domestic passenger market, data released by the Directorate General of Civil Aviation’s (DGCA) showed.

Here’s what leading brokerages expect from the results:

Centrum Broking

For the recently concluded quarter, analysts at Centrum Broking see the profit declining 7.7 per cent to Rs 176.3 crore primarily “due to lower net fleet addition and higher fuel costs”. The revenue, on the other hand, is seen at Rs 9,617.6 crore, up 21.5 per cent YoY from Rs 7,916.2 crore logged in Q3FY19.

“While we expect gross fleet addition of 65 in FY21E, we have also factored retiral of 30 A320 CEO aircrafts (in-line with company’s plan to retire 129 aircrafts by FY23). Consequently, we have revised our ASKM downwards by 4.5 per cent YoY to Rs 118 billion from Rs 123 billion,” they wrote in an earnings preview note.

Edelweiss Securities

The brokerage, meanwhile, firm remains slightly optimistic on the estimates, and expects the airline to post a profit of Rs 193.7 crore, up 1.5 per cent YoY. It further pegs the Earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) at Rs 2,216.1 crore for the quarter under review, up 39 per cent YoY from Rs 1,595.3 crore, logged in Q3FY19. The same was Rs 256.4 crore in Q2FY20.

“Decline in fuel CASK (-19 per cent YoY) will act as a tailwind, offsetting impact of lower yields. We expect EBITDA growth at over 20 per cent YoY while PAT will remain flat due to forex loss,” they wrote in an earnings preview note.

Prabhudas Lilladher

Analysts at the brokerage firm peg the profit before tax for the airline at Rs 282.5 crore, as against a PBT of Rs 191 crore reported in Q3FY19, thereby reporting the number higher by 48 per cent YoY.

They, further, expect IndiGo to report a yield expansion of 3.5 per cent benefitting from increased international operations. Consequently, sales are estimated at Rs 9,880 crore for the quarter under review.

“Despite 12 per cent YoY fall in ATF prices, CASK to remain under pressure due to increase in maintenance cost,” they said.

Motilal Oswal Financial Services

The brokerage firm would watch out for the management’s commentary on new aircraft deliveries from Airbus and progress on DGCA directive on A320neo aircraft engine replacement. The analysts believe the replacement “remains headwind on net capacity additions”.

The DGCA, recently, extended a 31 January deadline for modification of P&W engines installed on IndiGo’s A320neo planes to May-end. Until modifications are made to the faulty P&W engines, the airline has been permitted to fly on the condition that at least one of the two engines on the A320neo aircraft has been modified.

Sanjay Kumar returns to IndiGo as Chief Strategy and Revenue Officer

AirAsia India's former Chief Operating Officer Sanjay Kumar has joined IndiGo as its Chief Strategy and Revenue Officer, a source said on Tuesday.

Kumar had left IndiGo to join AirAsia India. He has also worked at erstwhile Sahara Airlines.

"Sanjay Kumar has returned to budget carrier IndiGo. This time he has joined the airline as its Chief Strategy and Revenue Officer from this month," the source told PTI.

He was not available for comments.There were no immediate response from IndiGo to PTI queries on this issue.

In November 2019, he quit AirAsia India after holding the position of Chief Operating Officer for less than a year. Prior to that, he was Chief Commercial Officer at IndiGo.

Jaipur-bound IndiGo flight forced to land in Mumbai due to engine glitch

A Jaipur-bound IndiGo flight from Pune made an emergency landing here on Thursday after it was diverted to the city due to a glitch in one of the engines of the Airbus A320 plane, a source said.

The number of passengers on board the flight could not immediately be known.

"The IndiGo flight which took off for Jaipur from Pune on Thursday morning was diverted to Mumbai after the pilot reported high engine vibrations in the aircraft mid-air. The flight made an emergency landing early morning," the source said.

IndiGo, in a statement, confirmed the diversion of its Jaipur flight to the city's Chhatrapati Shivaji Maharaj International Airport.

It, however, did not divulge the number of persons on board the aircraft.

"An IndiGo flight 6E-6129 (A320) operating from Pune to Jaipur was diverted to Mumbai this morning. During the flight, the pilot observed an engine vibration message and followed the laid standard operating procedures," a spokesperson said in the statement.

The aircraft is currently under inspection at Mumbai, the spokesperson said adding that all passengers were accommodated on another aircraft which further operated to Jaipur.

Link IndiGo gets time till May 31 to replace unmodified PW engines on A320neos

In a relief to IndiGo, aviation regulator DGCA on Monday decided to extend the deadline for the budget carrier to replace all 135 unmodified Pratt and Whitney (PW) engines on A320neo aircraft from January 31 to May 31.

Four Air Turn Back (ATB)/Inflight Shut Down (IFSD) events were witnessed on Airbus A320Neo aircraft operated by Indigo in a week during October 2019 due to the failure of 3rd stage LPT (low pressure turbine) blades.

Stating that "desperate measures" were required to "put things in order", the DGCA had on November 1 told IndiGo to replace the PW engines in 97 A320neo aircraft "at all costs" by January 31 or they would be grounded.

In some aircraft only one of the PW engines is unmodified and has to be replaced.

Later, unsatisfied with IndiGo's speed in replacing the unmodified PW engines, the regulator on November 25 had instructed it to ground an old A320neo family aircraft with an unmodified PW engine for every new A320neo plane added to its fleet to prevent large-scale cancellation of flights from January 31 onwards.

The Directorate General of Civil Aviation (DGCA) stated on Monday that it believes that the unmodified PW engines do contain an "unsafe condition, which is prone to undesirable outcomes" and therefore, need to be dispensed with.

"Post DGCA order dated 1st November 2019, all stake holders i.e. the airline and the aircraft and the engine manufacturer have made significant efforts towards completion of the task. They have jointly and severally submitted a complete action plan, which finds the change of engines for the entire fleet feasible by the end of June 2020," said the regulator in its press statement on Monday.

"It involves procurement of about 135 engines and month wise details have been worked out to achieve the goal. Needless to say, the timeline looks impressive if we recall that originally it was expected to be accomplished in 14 months i.e. from November 2019 to December 2020," it added.

However, DGCA felt that it can be compressed further and should be achievable by May 2020.

"Therefore, the revised timeline for complete removal of unmodified engines from the fleet is May 31st 2020. It is further laid down that no aircraft with unmodified engine in Indigo fleet shall be allowed to fly after that," said the regulator on Monday.

The PW engine-powered A320 neo planes in the fleets of IndiGo and GoAir have been facing glitches both mid-air and on-ground since their induction way back in 2016.

DGCA extends deadline till May 31 for IndiGo to replace P&W engines

India's aviation regulator on Monday said it has extended deadline for IndiGo to replace all 135 unmodified Pratt and Whitney (PW) engines from Jan 31 to May 31, news agency PTI reported.

The Directorate General of Civil Aviation (DGCA) had earlier directed the budget carrier to carry out replacements on 97 Airbus A320neo aircraft having turbine blades built with titanium by January 31, 2020 following a series of engine incidents. The airline will have to replace such aircraft with those having sturdier engine turbine blades built with nickel-chromium alloy, according to an earlier directive issued by the aviation regulator.

Last October, an Indigo A320neo heading to Pune suffered a problem with one of its engines during take-off from Kolkata. The aircraft returned to Kolkata and was grounded.

IndiGo faced 13 incidents of engine trouble last year, including four in a single week in October.

IndiGo may have to replace more engines as govt intensifies scrutiny

India has stepped up scrutiny of engines on Airbus SE’s A320neo jets, forcing the country’s biggest airline, IndiGo, to have to replace more than previously estimated, a move that could further delay the budget carrier’s expansion plans.

A “more intense boroscopic examination” of engines manufactured by Pratt & Whitney has identified more engines at risk of shutting down in midair, Arun Kumar, the head of India’s Directorate General of Civil Aviation, told Bloomberg News on Sunday. Out of roughly 200 engines in use, IndiGo will now have to replace at least 130. India’s aviation minister, Hardeep Singh Puri, had earlier put the figure at 110.

Kumar said the DGCA would decide in mid-January whether to grant IndiGo more time -- beyond the current Jan. 31 deadline -- before it started ordering some planes be grounded. The affected planes have continued to fly while the work is being done, since they have two engines.

The increased scrutiny will add further pressure on IndiGo, which has been prohibited from adding new routes or flights until it replaces all faulty engines. That could also add to pressure on Pratt, a unit of United Technologies Corp., to direct more engines to IndiGo, the largest customer for Airbus’ best-selling A320neo series, at a time when demand for Airbus jets has soared. A rival model made by Boeing Co. has been grounded since March following two crashes that killed hundreds of people.

“The not-so-good news is that it will take more time than envisaged owing to logistical challenges,” Kumar said. “About exact extension of time, we will be able to make a proper assessment sometime in the middle of January after taking a holistic view.”

He added that IndiGo has fully adopted a revised take-off method that doesn’t apply full thrust on the engines, a practice the regulator had linked to repeated in-flight turbine failures.

IndiGo didn’t respond to a request for comment. “We continue to work closely with the DGCA as part of our ongoing engagement, to ensure that we keep to schedules,” Ashmita Sethi, Pratt’s newly appointed head for India, said in a text message. Airbus said it was “working closely with Pratt & Whitney and the DGCA to maintain the schedule for engine deliveries.”

IndiGo, operated by InterGlobe Aviation Ltd., is the biggest budget carrier in Asia by market value, and has been adding jets at a breakneck pace of more than one a week. It has now opted for engines made by a joint venture of General Electric Co. and Safran SA for the second batch of planes on order, but deliveries of those have yet to begin.

IndiGo asks pilots to stop pushing Airbus engines to limit after shutdowns

IndiGo has told its pilots to stop pushing engines on its new Airbus SE jets to the limit when the planes are climbing, after India’s aviation regulator said the practice may have contributed to turbines failing in the air.

All the budget airline’s A320neo aircraft now use a lower thrust setting following take off, according to a spokeswoman from IndiGo, which has suffered 13 engine shutdowns during ascents this year. The decision was taken “in order to make every possible effort to minimize exposure of engines,” she wrote in an email, adding that manufacturer Pratt & Whitney stated there’s no evidence of a connection between climbing procedure and engine incidents.

Ascending at maximum power can help burn less fuel as it takes less time to reach cruising altitude. IndiGo made the switch only after India’s Directorate General of Civil Aviation found in a probe—first reported by Bloomberg on Friday—that full-thrust climbs could wear down the engines and probably contributed to the shutdowns, people familiar with the matter said earlier.

IndiGo instructed pilots of the A320neo-family of jets last month to use no more than 93% thrust on the Pratt engines until they reach 25,000 feet (7,622 meters), the people said. They asked not to be identified because the change hadn’t been made public.

The airline spokeswoman said the change had “hardly any difference” in day to day operations, beyond taking two to three minutes longer for aircraft to reach optimum flight level due to lower thrust settings. “Difference in fuel consumption is marginal,” she said.

IndiGo, operated by InterGlobe Aviation Ltd., is among the world’s fastest-growing carriers. Smaller rival Go Airlines India Ltd., which uses the same Pratt engine, typically uses the more gentle alt-climb approach now employed by IndiGo and hasn’t faced similar engines failures, people familiar with the matter have said.

Pratt representatives didn’t immediately respond to requests for comment, while the DGCA declined to comment on what it described as an internal issue for IndiGo. Airbus declined to comment on its customers’ operations.

Holding back expansion

IndiGo’s mid-flight dramas have been a headache for the airline. The DGCA has said every time a new plane joins IndiGo’s fleet, it must ground one A320neo that hasn’t had its engines fixed. That essentially prevents Asia’s biggest budget airline by market value from adding new flights until the issue is addressed.

IndiGo is the world’s top A320neo customer. It has 730 of the latest model on order and wants to expand its network beyond cities such as Istanbul to destinations including London.

IndiGo told pilots, engineers and training crew in mid November about the “alternate max climb rating option” on its A320neo-family of jets, the people said. Such a practice is also known as a “derated takeoff.”

The airline’s new guidelines say the Pratt engines on the A320neo cannot return to full thrust before 31,000 feet, while the bigger A321neo needs to gain a further 2,000 feet before maximum power is applied, they said. That process will reduce wear and tear on the engines, and will be applicable to all new engines as well, one of the people said.

Pratt, a unit of United Technologies Corp., invested $10 billion to develop its fuel-efficient geared-turbofan engine for single-aisle jets like the A320neo, but it has suffered repeated setbacks since its commercial introduction in 2016, including a cooling problem, durability issues and delivery delays.

IndiGo shifted away from the engines in June with a $20 billion order to CFM International Inc., a joint venture between General Electric Co. and France’s Safran SA, although those deliveries have yet to start.

Did full thrust revving of engines lead to grounding of Indigo's Airbuses?

IndiGo and Go Airlines India Ltd. use the same type of engine made by Pratt & Whitney that’s susceptible to mid-flight shutdowns. Yet IndiGo, one of Airbus SE’s biggest customers, is the only one to encounter turbine failures this year, drawing heavy scrutiny from the aviation regulator.

The reason could be linked to how the budget airline flies. India’s Directorate General of Civil Aviation told IndiGo’s operator, InterGlobe Aviation Ltd., that its practice of revving A320neo jets at full thrust right after takeoff could wear down the engines, people familiar with the matter said. By contrast, Go Air — India’s fourth-largest carrier by market share — typically uses a so-called alt-climb approach that applies less thrust, the people said, asking not to be identified discussing a private matter.

Climbing at full thrust can help planes burn less fuel, two of the people said. IndiGo has suffered 13 engine shutdowns related to low-pressure turbines during climbs this year, according to one of the people who was directly involved in an investigation where the DGCA ran a comparative analysis on how both airlines operate.

The issue has been costly. The DGCA this week said every time a new plane joins IndiGo’s fleet, it must ground one A320neo that hasn’t had its engines modified. That essentially prevents Asia’s biggest budget airline by market value from adding new flights until the issue is fixed. IndiGo has 730 of the latest model on order — making it the world’s top A320neo customer — and wants to expand its network beyond cities such as Istanbul to destinations including London. InterGlobe’s shares rose 1 per cent Friday.

Pratt, a unit of United Technologies Corp., invested $10 billion to develop its fuel-efficient geared-turbofan engine for single-aisle jets like the A320neo, but it’s suffered repeated setbacks since its commercial introduction in 2016, including a cooling problem, durability issues and delivery delays. IndiGo shifted away from the engines in June with a $20 billion order from CFM International Inc., a joint venture between General Electric Co. and France’s Safran SA, although those deliveries have yet to take place.

An IndiGo spokeswoman said the matter is “strictly between the airline and the concerned authorities.” The US Federal Aviation Administration hasn’t established any connection between the climb procedure and engine problems, she wrote in a text message, adding that the safety of passengers, crew and aircraft remains the utmost priority.

An Airbus spokesman said the planes are designed to handle full thrust, but it is “established best practice” for pilots to lower the thrust while climbing to reduce stress on the engine.

Pratt declined to comment on whether the climbing procedure can impact engines. A representative for the aviation ministry, which oversees the DGCA, referred queries to the regulator, saying it was a “technical” question. A Go Air spokesman didn’t immediately comment.

India originally asked IndiGo to replace all its faulty engines by Jan. 31, but the DGCA said Monday that the airline’s efforts to meet the deadline didn’t “instill enough confidence.” In a meeting with the regulator Monday, IndiGo offered to replace all unmodified engines by January 2021, but the request was denied, one of the people said, adding that the initial deadline remains.

IndiGo still needs to replace 110 engines out of 196 that were affected, Civil Aviation Minister Hardeep Singh Puri said Wednesday. He said Go Air hasn’t had the problems IndiGo encountered on its A320neo jets, without providing a reason. After the DGCA informed IndiGo of its findings, the company started taking steps to employ a climbing procedure similar to Go Air, the people said.

Given the number of replacements required and Airbus delivery delays, IndiGo may not able to update all the engines by the fiscal year ending in March, according to Motilal Oswal Financial Services Ltd. In a note Tuesday, the brokerage cut its capacity growth estimate for IndiGo to 14 per cent from 25 per cent this year, and to 6 per cent from 10 per cent for next year.

DGCA tells IndiGo to replace unmodified P&W engines in Neo aircraft

The aviation regulator on Monday barred the country’s largest carrier, IndiGo, from operating Airbus A320 and 321 Neo aircraft having turbine blades built with titanium, which is prone to damage leading to mid-air engine shut down. The airline will have to replace such aircraft with those having sturdier engine turbine blades built with nickel-chromium alloy, according to a directive issued by the Directorate General of Civil Aviation (DGCA).

People in the know said the move would impact around 110 engines, virtually putting a spanner on the expansion plans of IndiGo — counted among the fastest growing airlines in the world. The engines manufactured by Pratt & Whitney have been facing issues since induction in 2016.

IndiGo, in the last one year, has faced 13 such incidents including four incidents in a single week in October.

The airline will now have to slow down launching new routes, adding frequency as the new aircraft will be used to replace the grounded aircraft.

The extent of disruption will depend on how fast Pratt & Whitney can deliver the new engines but industry sources suggested that replacing 109 engines will impact IndiGo’s operations for close to a year. The airline during its post-results call had said that it intends to grow capacity by 25 per cent.

“Every aircraft that is added to the existing fleet should lead to one of those with unmodified engines to be grounded and the new aircraft may be operated on the same schedule as was being operated by the grounded aircraft,” a DGCA statement said.

Currently, the airline has 98 A320 and 321 Neo aircraft, of which 52 have modified engine blades. An IndiGo spokesperson, however, said as of now IndiGo was not changing any schedule. “The current schedule remains intact. The airline is working with Pratt and Whitney and Airbus to adjust the flow of engines,” the spokesperson said.

The direction from the regulator comes after a review meeting on Monday. DGCA has found that IndiGo was unable to convince the regulator that it would be able to replace all the unmodified engines by January 31, 2020 — a deadline fixed earlier.

Replacing Pratt engines in IndiGo fleet by January 31 a challenge: CEO

Replacing all Pratt & Whitney engines on IndiGo's fleet of almost 100 Airbus planes by January 31, as ordered by India's aviation watchdog, will be challenging but the airline aims to complete the work, its chief executive officer said on Monday.

India's aviation regulator on Nov. 1 ordered IndiGo to replace all Pratt & Whitney (P&W) engines on its fleet of twin-engined Airbus A320neo family aircraft with new P&W power units, following recent inflight engine shutdowns that caused "serious concern".

"It's a challenge. But we have every intention of meeting it. Pratt is helping us and we are trying to make that work as fast as we can," Ronojoy Dutta, IndiGo CEO, told Reuters on the sidelines of the Dubai airshow.

Low cost carrier IndiGo is Airbus' biggest client for A320neo planes, and while the United Technologies' P&W engines are fuel efficient there have been issues since they entered service in 2016, forcing the airline to ground its planes several times.

In June, IndiGo, India's biggest airline, dropped P&W in favour of French-U.S. engine venture CFM by agreeing a record $20 billion deal for more than 600 engines to power Airbus jets already on order.

In October IndiGo placed an order for another 300 A320neo-family jets but it has yet to decide the engine provider - P&W or CFM, which is jointly owned by France's Safran and General Electric of the United States.

"We will be talking to both Pratt and CFM, whoever has the best offer we will give it to them," Dutta said.

IndiGo is focussed on growing its international routes and the plane order includes a long-range version of the single-aisle A320neo family, A321XLR which will provide the airline with "a lot of growth", Dutta said.

He said ordering widebodies was a distant dream for IndiGo and a part of its five-year plan but no decision had been finalised.

Dutta also said that a dispute between the airline's two promoters and largest shareholders, Rahul Bhatia and Rakesh Gangwal, was having no impact on the company.

"Both promoters are very much unified in their strategy for expansion. Let's grow fast, let's expand international, they agree with that completely," Dutta said.

IndiGo inks codeshare pact with Qatar Airways for Delhi-Doha flights

Top Indian airline IndiGo said on Thursday it signed a one-way codeshare agreement with Qatar Airways, letting the Middle Eastern airline get more access to the fast-growing Indian market.

The agreement will enable Qatar Airways to place its code on IndiGo flights between Doha and Delhi, Mumbai and Hyderabad, the companies said.

IndiGo, owned by InterGlobe Aviation, has about 40 per cent share of the domestic market and operates a large fleet of narrowbody aircraft.

The companies did not mention Qatar Airways making an equity investment in IndiGo, despite it having long expressed interest in doing so.

Qatar Airways chief executive Akbar Al Baker said on Tuesday the company would not buy a stake in IndiGo, CNBC-TV18 reported, citing agencies.

The deal comes at a time when IndiGo's two co-founders, Rakesh Gangwal and Rahul Bhatia, have been embroiled in a dispute about corporate governance of the airline, sparking concern among investors it could have an impact on the airline's valuation and strategy.

The airline had once shunned codeshare deals to help keep costs low in line with its budget carrier model but changed its strategy as it grew to become the dominant airline in the Indian market and looked to grow international capacity.

In December 2018, as rival Jet Airways Ltd was faltering financially ahead of a permanent grounding this April, IndiGo signed a codeshare deal with Turkish Airlines.

IndiGo last week placed an order for 300 Airbus A320neo family planes, including its newest jet, a long-range version of the single-aisle A320neo family called the

DGCA threatens to ground IndiGo A320neo planes if PW engines not replaced

Aviation regulator DGCA asked IndiGo on Friday to replace Pratt and Whitney (PW) engines of 23 A320neo planes by November 19 or else they would be grounded.

The regulator also asked IndiGo that all 97 such aircraft in its fleet must have modified PW engines by January 31 next year "at all costs".

The DGCA directive came after the airline faced four engine malfunctions in A320neo planes in the last one week, which "has caused serious concern and resultant disruption".

The Directorate General of Civil Aviation (DGCA) on Monday had asked IndiGo to replace 16 A320neo planes' PW engines, which have been used for more than 2900 hours, by November 12 but it found later that seven more aircraft are flying with such engines.

"Kindly note that after that none of these 23 aircraft, which does not have at least one LPT (low pressure turbine) modified engine on its wings, shall be allowed for commercial operation and their schedule will suitably be curtailed till this is accomplished," the DGCA said in a press note.

On Wednesday, one of the Pratt and Whitney engines of an IndiGo A320neo plane that was heading to Pune stalled mid-air, forcing the pilot to return to Kolkata.

On three consecutive days from October 24 to 26, IndiGo had three in-flight PW engine shutdowns, compelling the DGCA to visit the airlines' premises on Monday to review the maintenance and safety data.

IndiGo shares gain most since 2016 on $30-bn Airbus aircraft order

Indian budget airline IndiGo headed for its biggest gain in more than three years after placing a blockbuster order with Airbus SE worth over $30 billion at sticker prices.

Shares of IndiGo’s operator InterGlobe Aviation Ltd. surged more than 8% in Mumbai, in line for their best daily advance since early 2016. The stock is still below a record high of 1,898.85 rupees ($26.76) hit on Sept. 30, after slipping through October.

IndiGo’s order for 300 jets from the A320neo family, including the XLR long-range variant, sets it up for a sustained expansion and could help consolidate its lead in India, the world’s fastest-growing major aviation market last year. Asia’s biggest budget carrier by market value has ordered more than 800 Airbus jets in the past 15 years as it embarks on an ambitious overseas expansion.

“IndiGo may be trying to gain beneficial pricing in a difficult sales year,” said George Ferguson, a senior aerospace analyst at Bloomberg Intelligence. That “obscures a poor year for aircraft sales, as airline profits slow in most markets except the U.S.”

IndiGo has specialized in bulk orders since it started operations in 2005, helping it win big discounts and lucrative maintenance deals with Airbus. The airline typically sells aircraft to lessors and then leases back, making a profit in the process and keeping a young fleet that consumes less fuel.

The airline, founded by ex-US Airways Chief Executive Officer Rakesh Gangwal and former travel agent Rahul Bhatia, has quickly outpaced rivals in India. Yet the picture isn’t entirely rosy: IndiGo posted its biggest-ever quarterly loss last week and the two billionaire founders are engaged in a legal battle.

The Indian aviation market has lured the likes of Singapore Airlines Ltd. and AirAsia Bhd. to set up local units. But provincial taxes make the subcontinent one of the most expensive places to buy jet fuel and intense competition has often driven fares below cost, making profits elusive for most airlines.

IndiGo seeks staff support amid biggest quarterly loss of Rs 1,062 crore

Budget carrier IndiGo on Tuesday sought the "support" of its employees following its biggest quarterly loss in the September quarter, saying that it will have to deal with the "weakening" revenue environment going forward.

Hit by higher costs related to the operating lease liabilities, IndiGo reported a net loss of Rs 1,062 crore in the September quarter as against a net loss of Rs 651.5 crore in the corresponding period a year ago.

"We will be dealing with the weakening revenue environment with a sharper focus on cost for which we seek your support. Operationally, we should continue our focus on safety, our on-time performance and on delivering a courteous, hassle free service," IndiGo chief executive officer Ronojoy Dutta said in a communication to employees.

He, however, said that the carrier has a "very strong" balance sheet, which allows it to remain committed to the growth strategy and expansion and a firm order with Airbus 300 new A320neo family aircraft was a part of the growth plans.

Citing a two accounting issues as the reason for the record loss, Dutta said that the airline was estimating a reasonable financial performance with an expected 5.7 per cent growth in unit revenue and unit costs better by around 1.5 per cent.

"But then we had to deal with two accounting issues," he added.

"As a result of these accounting adjustments, our reported unit revenue performance was not affected and remained strong at a 5.7 per cent increase but our unit costs instead of being better by 1.5 per cent, now had a reported worsening of 2.8 per cent," he added.

Moreover, the July-September is always a weak one for the industry, he said.

Earlier, the airline announced that it has placed a firm order for 300 A320neo family aircraft, comprising A320neos, A321neos and A321XLRs.

"We have more growth opportunities than we can meet with our existing fleet of aircraft. As we spread our wings and add more destinations, we need to extend the range of our operations and that is why we have added the A321XLR aircraft to our aircraft order," Dutta said in the communication.

This new order further reaffirms IndiGos commitment to the long-term development of affordable air transportation in the country and overseas, he said.