New Delhi: India said all Airbus SE A320neo jets operated by IndiGo, the model’s biggest customer, must get fixes for their Pratt & Whitney engines by January 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 regret the inconvenience but 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. The scrutiny also threatens to hamper expansion at IndiGo, which has close to 100 A320neo-family jets in its fleet and is adding them at a rate of more than one a week.
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Shares of InterGlobe Aviation Ltd, which operates IndiGo, erased gains of as much as 3.5 per cent to close down 1.3 per cent 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 per cent 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 IndiGo didn’t respond to a call and messages. An Airbus spokesman said it’s supporting the airline together with the engine manufacturer. MTU referred calls to Pratt.
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.
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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 per cent of all sales of the model.