India Threatens to Ground Jets Unless Engines Fixed, After Four Incidents
DGCA tells IndiGo to replace PW engines of 23 A320neo planes by Nov. 19 or face grounding.
(Bloomberg) -- India said all Airbus SE A320neo jets operated by IndiGo, the model’s biggest customer, must get fixes for their Pratt & Whitney engines by Jan. 31 or be grounded. Shares of the airline fell.
There have been four incidents involving IndiGo-operated jets with Pratt engines in the past week, India’s Directorate General of Civil Aviation said in a statement Friday, expressing its “serious concern.” That compares with 15 for all Indian operators in three years through August.
“Four successive events have not happened ever before,” it said. “We need desperate measures to put things in order.”
The move marks a further setback for Pratt, a unit of United Technologies Corp., which has suffered delivery delays and groundings in India. IndiGo, which has close to 100 A320neo-family jets and is adding them at a rate of more than one a week, said it will work with the engine maker and Airbus so that it has enough modified spare turbines to meet the requirement.
Shares of InterGlobe Aviation Ltd., which operates IndiGo, erased gains of as much as 3.5% to close down 1.3% at 1,438.65 rupees in Mumbai. MTU Aero Engines, part of the Pratt-led group that makes the so-called geared turbofan power-plant, fell 2.4% in Frankfurt before later trading flat.
The engine makers may need to provide 100 to 150 new turbines or spares in the next three months, representing a “significant additional burden,” Morgan Stanley analyst Andrew Humphrey said in a note. The Indian move could require compensation payments and risks impacting airline operations, he said.
A Pratt representative in India had no immediate comment, while an Airbus spokesman said it’s supporting the airline together with the engine manufacturer. MTU referred calls to Pratt.
Indigo has 98 A320neo planes, with around 45% of its engines modified, according to a statement. The airline said it was confident of meeting the stipulations of an earlier directive, while describing efforts to comply with the expanded requirements as “mitigation.” The flying schedule remains intact in the meantime, it said.
The DGCA order doesn’t apply to Go Airlines India, the other operator that flies with the same engine in the country, based on “their safety record,” Arun Kumar, the agency’s chief, said in a separate message.
The order follows a directive earlier this week in which India said close to 30 A320neos operated by the two Indian airlines will be grounded if they don’t receive at least one updated Pratt engine within 15 days. The DGCA now says it has identified seven more IndiGo aircraft in a similar category, while extending the deadline to Nov. 19.
IndiGo decided in June to switch away from engines made by the United Technologies division, ordering $20 billion of rival turbines from the CFM venture of General Electric Co. and France’s Safran SA.
The airline must fix its problem “at all costs,” and may want to “stagger or defer” plans add more aircraft, the regulator said. It earlier this week agreed to buy 300 more A320neos worth in excess of $33 billion at list prices, taking total orders to 730 or more than 10% of all sales of the model.
--With assistance from Richard Weiss, Lisa Pham and James Cone.
To contact the reporter on this story: Anurag Kotoky in New Delhi at akotoky@bloomberg.net
To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, Christopher Jasper
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