Begin typing your search...

Indian aviation industry to face the brunt of supply chain disruptions

Indian aviation industry to face the brunt of supply chain disruptions

Indian aviation industry to face the brunt of supply chain disruptions

Around 200 aircraft of domestic carriers are expected to be grounded by the end of the current financial year (March 31, 2024), aviation consultancy firm Capa India has said in its mid-year outlook. More than 90 of them will be that of the country’s largest carrier IndiGo. Air India is projected to ground 25-30 planes while SpiceJet's numbers will be around 27. Currently, there are 161-166 planes of IndiGo, Air India, Go First and SpiceJet that are on the ground. Overall, the aviation sector is likely to have a fleet size of close to 790 aircraft by March, of which 588 aircraft are likely to be operational, the aviation research firm said. CAPA India also foresees delays in aircraft deliveries for India's youngest airline Akasa Air. Earlier this month, IndiGo said that it is likely to ground about 35 more aircraft due to the powder metal issue on its Pratt & Whitney (P&W)-powered fleet. The airline had earlier informed that out of its fleet of 334 planes, the number of grounded PW-powered aircraft now stands at over 40.

The report noted that in terms of the total number of flyers, the domestic and international passenger traffic for the current financial year is expected to be around 155 million and 70 million passengers, respectively. Indian airports registered 57 million international passengers and the domestic air passenger traffic stood at 136 million passengers in FY 2022-23. Over 25 per cent of the fleet operated by Indian carriers will be out of commission by March, potentially resulting in an annual cost ranging from $ one billion to $ 1.2 billion, according to assessments made by CAPA India. The standard monthly cost an active aircraft incurs is about $ one million and if it’s grounded, the cost comes down to $ 0.5 million, according to CAPA’s ‘conservative’ estimates. "With planned replacement capacity, a conservative estimate of fixed airline cost for around 100 grounded aircraft is $500-600 million (prior to compensation from equipment maker)," the report noted.

Effectively by March, about 196-201 out of 789 aircraft with Indian carriers are expected to be grounded, primarily due to supply chain issues. "With 200 aircraft expected to be grounded (with possibly more in 2024-25)…there is a possibility that airline risks could evolve into industry risks, and potentially country risks," CAPA India mentioned. At the heart of the issue is a disrupted supply chain, causing over 160 planes to be grounded, a number expected to rise to 200 by FY24-end, says the Centre for Aviation (CAPA). Looking ahead to March, the agency also predicts a fleet of almost 790 aircraft, of which only 588 may be operational. This grounding has also affected the on-time performance of airlines, leading to a drop, according to sources in the Ministry of Civil Aviation.

This, in turn, impacts the travel schedules of consumers, who bear the brunt of operational delays and soaring airfares. As per official data, the on-time performance (as on December 3) of Akasa Air is at 84.1 per cent, while Air India is at only 44.2 per cent, Indigo at 73.5 per cent, Vistara at 69.5 per cent and SpiceJet at 54.4 per cent.

Bizz Buzz
Next Story
Share it