Top Airbus A320neo Customer to Cut Fleet Size Over Two Years

IndiGo will trim its fleet size over the next two years as the coronavirus pandemic continues to weigh on Asia’s biggest budget airline by market value and other carriers around the world.

“Fleet count will be stagnant, go down a little,” Chief Executive Officer Ronojoy Dutta told analysts during a post-earnings conference call Thursday. “In 2022, we will be down slightly, by 2023, we will be up again.”

IndiGo, operated by InterGlobe Aviation Ltd., hasn’t engaged in any “major renegotiation” with Airbus SE on new deliveries, but it will keep returning as many as 40 older planes a year, Dutta said. IndiGo is the world’s biggest buyer of Airbus’s best-selling A320neo-family of jets, having ordered as many as 730 of them, and is the market leader in India.

Airlines globally have cut back on expansion plans and deferred or canceled orders with Airbus and Boeing Co., forcing the planemakers to cut production and thousands of jobs. IndiGo, like many other carriers, sells planes to lessors and then leases them back, enabling it to operate a younger fleet with lower fuel consumption.

IndiGo had 282 planes, including 117 of an older A320 model at the end of September. The airline has previously said it plans to return all of the older models in two years.

India’s airlines will have more than 250 surplus aircraft in the year ending March due to plummeting demand, according to an analysis by Sydney-based CAPA Centre for Aviation. Local airlines will lose as much as $4.5 billion in the period, CAPA said in a report released Thursday.

IndiGo’s shares fell 1.2% Friday morning in Mumbai after a 2.9% gain the previous day. Smaller rival SpiceJet Ltd. was up 2.3% as of 9:42 a.m. local time.

©2020 Bloomberg L.P.

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