New Delhi

The Indian aviation industry is set to scale new heights. Despite facing supply chain challenges and engine failures, the industry is poised for significant growth in the coming years, according to a recent report by the ICRA Limited, a leading credit rating agency.

In FY2024, Go Airlines (India) Limited grounded half of its fleet due to faulty P&W engines, which led to the stalling of its operations. InterGlobe Aviation Limited (IndiGo) had also grounded more than 70 aircraft due to the Pratt & Whitney (P&W) engine issues, as of February 2, 2024, including an issue from powder metal (used to manufacture certain engine parts) contamination with its P&W fleet, the report said.

It is estimated that 24-26 per cent of the total fleet of the Indian airlines in operations was grounded by March 31. Considering the bulk recall of the engines globally by P&W and other existing issues with the Original Equipment Manufacturer (OEM) engines, the testing by the P&W is likely to take longer at 250-300 days, the report said.

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This will result in high operating expenses towards the cost of grounding, an increase in lease rentals due to an additional aircraft being taken on lease to offset the grounded capacity, rising lease rates and lower fuel efficiency (due to replacement with older aircraft taken on spot lease), which will adversely impact an airline’s cost structure, it added.

However, healthy yields, high passenger load factor (PLF) and partial compensation available from OEM’s engines would help absorb the impact to an extent.