Indigo Aircraft Shortage Is Impeding Business Goals In The Midst Of A Travel Boom.
IndiGo appears to be optimistic about its expansion, but the strain caused by a dearth of aircraft supply is not something they are happy with.
Delays in receiving jet deliveries from Airbus (AIR.PA) owing to supply chain problems are hampering IndiGo’s ability to develop as swiftly as it would want in some areas, according to the airline’s CEO Pieter Elbers. The Indian aviation business is thriving as demand for air travel rises from pandemic lows. With global demand for jets on the rise, Boeing (BA.N) and Airbus are trying to fill an overflowing order book despite supply chain concerns.
There is a great opportunity in the markets where they would like to serve people but are unable to do so to the level they would like, Elbers said when questioned about the pressure from a scarcity of aircraft supply. Customers are once again banging on the doors, wanting to fly. There is a market somewhere. Elbers noted that the overall strain on the supply chain is something they are not satisfied with.
India, which is anticipated to become the world’s third-largest economy by 2030, has the fastest-growing civil aviation sector, and Boeing predicts that its carriers would require 2,210 new planes over the next 20 years.
The dominion hold of Indigo.
IndiGo, India’s largest airline with a market share of more than 50%, has experienced a boom in local and foreign demand, with capacity more than tripling in the last year. With a great market share, the low-cost carrier is the country’s largest airline. Elbers responded to a query by saying that the Indian aviation industry will progress towards more sustainable financing and that the sector is more robust. The airline’s activities are being internationalized. It intends to launch flights to Nairobi, Jakarta, and a few more Central Asian cities.
IndiGo is meeting some of this demand in the short term by extending leases on current planes and collaborating with partners like Turkish Airlines (THYAO.IS), which has hired IndiGo, a big jet complete with the crew to fill international capacity.
In terms of scale, the operation was perhaps half the size it is now a year ago. As a result, they have concentrated all of their efforts on returning to 1800 flights a day. IndiGo also has 500 aircraft on order, including A321 XLRs, Airbus‘ newest and biggest narrowbody airliner, which would provide the airline with “a constant flow” of deliveries till the end of the decade, according to Elbers.
‘Work in progress’ for A321xlr.
According to sources, IndiGo is in discussions to put a fresh order for more than 500 airplanes, including widebody planes, signaling a change away from its single-aisle strategy. Elbers declined to comment on any orders but stated that adding widebodies to its fleet is not out of the question. Airbus confirmed this week that the A321XLR will be delivered to an unnamed initial operator in the second quarter of 2024.
The first A321XLR for IndiGo should come in “the 2025-ish timeframe,” according to Elbers, who added that the general form of deliveries has yet to be determined. They haven’t done that one yet, he said, adding that everything is still in the works.
Experts believe the A321XLR will play an important role in the expansion ambitions of airlines such as IndiGo, which intends to expand into Western Europe while profiting from the narrow-body jet’s cheaper costs. Nevertheless, the plane’s development has been hampered by regulatory requirements for a unique sort of fuel tank.
These modifications have resulted in an additional 500 kilogram of structural weight, enough to reduce the vehicle’s range by several hundred miles, according to two people familiar with the project. Airbus did not respond immediately to the weight impact.
CAPA India, an aviation consultant, predicts at least 1,300 additional orders from Indian carriers in the next one to two years, only weeks after Air India announced a record purchase of 470 planes.
IndiGo, which has been an exclusive customer of Airbus narrow-body planes till now, is also in negotiations with Boeing to break Air India’s record with an order for more than 500 passenger jets, according to industry sources earlier in March. The airline has bought a total of 830 Airbus A320-family planes, with over 400 still on order.
Disclosure.
IndiGo is entering the next phase of its expansion, and cost leadership is critical for the airline. It has been highlighted that the country’s aviation sector’s V-shaped recovery has been part of the learning process. IndiGo appears to be optimistic in its expansion, but the strain caused by a dearth of aircraft supply following a rebound in demand for air travel is not something they are happy with.
Edited and proofread by nikita sharma
