Engine and Service Issues Spell Trouble for the Distressed Indian Aviation Sector

The Indian aviation sector is experiencing turbulence, which has been exacerbated this week by the grounding of nearly 22% of its fleet owing to engine and repair concerns. The cancellation of Go First flights has further aggravated the problem. According to a MInt research, 147 of the 655 aircraft managed by India's seven main carriers have been grounded over the past seven days. This information was acquired via aeroplane tracking platforms.

Go First Woes Continue

Due to the interim suspensions of its entire flying operations, Go First, which recently filed for insolvency, adds considerably to the grounded fleet. Almost half of Go First's 54 aircraft have already been grounded owing to problems with the Pratt and Whitney engines that power its Airbus A320neo fleet. 

On May 3, the airline announced the suspension of its remaining fleet, claiming an unviable financial condition caused by engine troubles since 2016.

IndiGo Planes Out of Sevice

With 40 of its jets out of service, India's largest airline is fairing only marginally better. However, given the airline's enormous 300-plane fleet, this is not a major worry. IndiGo also utilises Pratt & Whitney engines on some of its A320neo aircraft and has had roughly 10% of its fleet grounded since October of last year.

IndiGo's CEO told analysts in February that they are in close communication with the manufacturers and that improvement in the situation is dependent on the supply chain and when they will give all of the essential components to the airline. "But, again, I think here, we really rely on OEMs (Original Equipment Manufacturer) and supply chain facilitation on that part," he said. He expected the situation to improve during the year.

Financial Health and Unavailabilty of Parts Trouble for SpiceJet

The budget airline SpiceJet has a fleet of 61 aircraft, 27 of which are currently out of operation, leaving only 55% of the total fleet to function. Its primary reasons are stagnating financial health, while there are also some instances of unavailability of parts. 

The Directorate General of Civil Aviation (DGCA) has also received requests from Ireland’s lessor SMBC to de-register three SpiceJet aircraft on May 10. Meanwhile, the airline’s chairman and managing director, Ajay Singh, recently said that SpiceJet will revive 25 grounded aircraft with funds under Emergency Credit Line Guarantee Scheme.

It remains to be seen when and if these planes will become operational.

Tata Group’s Airlines in Relatively Better Condition

The country's national carrier, Air India, now controlled by the Tata group, has 18 of its 118 aircraft grounded. Other airlines in the Tata eco-system, such as Vistara, have grounded just four planes out of a total of 63, and AirAsia India has grounded only one aircraft out of its 28-plane fleet. Meanwhile, three of Air India Express's 28 planes are grounded. 

Unavailability of Parts and High Air Fare

According to media reports, several airline executives and experts believe that global supply chain concerns have hampered the delivery of critical plane parts. The situation may not abate until the end of the year or early next year. 

Analysts predict that plane fares will also stay elevated during the current quarter owing to increased travel demand as schools begin their summer vacations. 

While expensive flight tickets may help airlines produce high profits, demand is expected to suffer as airlines struggle to swiftly add this amount of capacity loss throughout the sector. 

With the increasing speed of the railways and an ever-expanding road network throughout most of the country and air ticket prices soaring, people are bound to question how feasible is it to fly domestically. India’s aviation industry has been a challenging arena even for the best of airlines. It remains to be seen how the industry will work-out a solution for this predicament.