“In FY2024, Go Airlines (India) Ltd grounded half of its fleet due to P&W engine failure, leading to grounding of its operations. InterGlobe Aviatio Limited (IndiGo) had also grounded over 70 aircraft due to Pratt Whitney (P&W) engine issues till February 2, 2024, with its P&W fleet being affected by powder metallurgy (including some engine parts. The problem of contamination was also included. ,” the report said.
It is estimated that 24-26 percent of the total fleet of Indian Airlines had ceased operations by March 31.
"Taking into account the large number of engines recalled globally by P&W and other existing issues with original equipment manufacturer (OEM) engines, P&W's testing will take 250-300 days," the report said. It is likely to take more time.,
“This will result in higher operating expenses for the cost of grounding, increased lease rentals due to taking an additional aircraft on lease to balance the grounded capacity, increased lease rates and lower fuel efficiency (due to replacement with older aircraft). spot lease), which will adversely impact the cost structure of the airline,” it added.
However, healthy yields, higher passenger load factor (PLF) and partial compensation available from engines from OEMs will help absorb the impact to an extent.
Meanwhile, the report also claimed that capacity deployment for March 2023 was 1.8 per cent higher than that for March 2023 (93,785 departures in March 2023 against 92,098 departures in March 2023).
"Additionally, the number of departures in March 2024 was 9.2 per cent higher on a sequential basis," ICRA said in its report.
The report said that in March 2024, domestic air passenger traffic stood at 13 lakh as against 129 lakh in March 2023, showing a year-on-year growth of 4.9 per cent.“Although, on a sequential basis, domestic air passenger traffic was 6.9 per cent higher in March 2020, there were fewer days in February compared to March,” it said.
ICRA said that while some airlines have adequate liquidity and/or financial support from their strong parents, supporting their credit profiles, others' credit metrics and liquidity profile remain weak despite some improvement compared to the past. , will remain under tension in the near future. Year.
Half of Go Airlines (India) Ltd's fleet was grounded due to faulty P&E engines, leaving it facing default in payments with vendors, aircraft lessors and financial lenders.
As a result, GoFirst filed for bankruptcy in the National Company Law Tribunal (NCLT), which froze the airline's assets and prevented lessors from repossessing their aircraft, which was appealed to the National Company Law Appellate Tribunal (NCLAT). Was retained.The airline has lost its airline code 'G8' assigned by the International Air Transport Association (IATA), due to be non-operational from May 2023.
In February 2024, NCLT extended the deadline to complete the resolution process of GoFirst by 60 days. A two-member bench of the Delhi-based NCLT accepted the plea filed by resolution professional (RP) O Gofirst seeking extension of the deadline to complete the corporate insolvency resolution process (CIRP).
“The maximum period for completing the resolution process as per Section 12 of the IBC (Insolvency and Bankruptcy Code) is 330 days, which ended on April 4, 2024. However, on 8 April 2024, NCLT gave an extension of 6 days.To complete CIRP by June 3, 2024,” the report said.
It is estimated that 24-26 percent of the total fleet of Indian Airlines had ceased operations by March 31.
"Taking into account the large number of engines recalled globally by P&W and other existing issues with original equipment manufacturer (OEM) engines, P&W's testing will take 250-300 days," the report said. It is likely to take more time.,
“This will result in higher operating expenses for the cost of grounding, increased lease rentals due to taking an additional aircraft on lease to balance the grounded capacity, increased lease rates and lower fuel efficiency (due to replacement with older aircraft). spot lease), which will adversely impact the cost structure of the airline,” it added.
However, healthy yields, higher passenger load factor (PLF) and partial compensation available from engines from OEMs will help absorb the impact to an extent.
Meanwhile, the report also claimed that capacity deployment for March 2023 was 1.8 per cent higher than that for March 2023 (93,785 departures in March 2023 against 92,098 departures in March 2023).
"Additionally, the number of departures in March 2024 was 9.2 per cent higher on a sequential basis," ICRA said in its report.
The report said that in March 2024, domestic air passenger traffic stood at 13 lakh as against 129 lakh in March 2023, showing a year-on-year growth of 4.9 per cent.“Although, on a sequential basis, domestic air passenger traffic was 6.9 per cent higher in March 2020, there were fewer days in February compared to March,” it said.
ICRA said that while some airlines have adequate liquidity and/or financial support from their strong parents, supporting their credit profiles, others' credit metrics and liquidity profile remain weak despite some improvement compared to the past. , will remain under tension in the near future. Year.
Half of Go Airlines (India) Ltd's fleet was grounded due to faulty P&E engines, leaving it facing default in payments with vendors, aircraft lessors and financial lenders.
As a result, GoFirst filed for bankruptcy in the National Company Law Tribunal (NCLT), which froze the airline's assets and prevented lessors from repossessing their aircraft, which was appealed to the National Company Law Appellate Tribunal (NCLAT). Was retained.The airline has lost its airline code 'G8' assigned by the International Air Transport Association (IATA), due to be non-operational from May 2023.
In February 2024, NCLT extended the deadline to complete the resolution process of GoFirst by 60 days. A two-member bench of the Delhi-based NCLT accepted the plea filed by resolution professional (RP) O Gofirst seeking extension of the deadline to complete the corporate insolvency resolution process (CIRP).
“The maximum period for completing the resolution process as per Section 12 of the IBC (Insolvency and Bankruptcy Code) is 330 days, which ended on April 4, 2024. However, on 8 April 2024, NCLT gave an extension of 6 days.To complete CIRP by June 3, 2024,” the report said.
