IndiGo in talks to place $10 billion jet engine order with Pratt & Whitney, CFM

At a time when aviation sector faces huge revenue loss amid muted demand and travel restrictions imposed in wake of coronavirus pandemic, low cost airline IndiGo is reportedly in talks with Pratt & Whitney and CFM International Inc. for its next batch of jet engine orders.

The airline is in preliminary discussions with the rival manufacturers for jet engine order that would power about 150 new Airbus SE A320neo jets, according to Bloomberg. As per the report, there is no timeline on when the deal will be finalised.

Last year, IndiGo had placed a $20 billion (about Rs 1.4 lakh crore) engine order with CFM International to power 280 Airbus A320neo and A321neo aircraft. Based on the last order, the new order is estimated to be around $10.7 billion, including service, repair, and maintenance, the report said.

According to industry expert, the coronavirus crisis offers a unique opportunity for IndiGo to bargain with the engine makers to grab the deal at attractive price.

Also Read: IndiGo Q2 results: Loss widens to Rs 1,195 crore, revenue plunges 65%

IndiGo, that has been a CFM customer since 2016, is the world's biggest customer for jets in the A320neo family, with total order of 730. It currently operates a fleet of 282 aircrafts, including 117 A320 CEOs, 1 16 A320 NEOs, 24 A32 I NEOs and 25 ATRs.  

The Gurugram-headquartered airline is planning to retire its old-generation Airbus A320ceo aircraft which require high maintenance cost and use more ATF per flight. In its place, the airline is inducting A320neos and A321neos which are more efficient aircraft. The airline plans to replace all A320ceo aircraft by December 2022 at the rate of 30-40 aircraft per year. This will make its fleet a lot younger.

Also Read: IndiGo heading towards golden years, here's why

For the July-September quarter of the current fiscal, the airline's parent company InterGlobe Aviation reported loss for the third consecutive quarter. The company posted a net loss of Rs 1,195 crore as against a net loss of Rs 1,062 crore in the corresponding period of the previous year. The airline had recorded its sharpest quarterly loss in at least five years at Rs 2,844 crore in the June quarter of this fiscal as coronavirus-related restrictions hit operations badly.