(MENAFN- Live Mint)

New Delhi: Engine maker Pratt & Whitney has assured IndiGo that it intends to replace faulty engines of 40-odd grounded planes of the country's largest airline by end-June 2026, said two persons with knowledge of the development.

This move potentially will boost IndiGo's profitability this year and next, depending on the pace of engines replacement, reducing the carrier's reliance on costly leased planes to offset the nearly-10% unused aircraft on its fleet.

The airline flies two of three passengers in India.

Forty planes with Pratt & Whitney engines are grounded while 60 are flying.

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“There is an assurance for a staggered improvement in the aircraft on ground situation with a June timeline," said the first person, on the condition of anonymity, as the discussions between the world's second-largest commercial aircraft engine maker and IndiGo are private.

The second person, who also wanted to remain unidentified, said some timelines are still under discussion and revision possibilities cannot be ruled out if global supply constraints persist.

Emails sent to Pratt & Whitney and IndiGo seeking comment went unanswered.

A resolution could help IndiGo's profitability, according to at least one analyst.

Gagan Dixit, analyst at Elara Capital said, the refitting of grounded planes by Pratt & Whitney is well-aligned with new airports opening up around cities that originate the most number of air passengers in India.“As new airports in Mumbai (Navi Mumbai) and Delhi (Jewar) open up, this will correspond with IndiGo's planes being ungrounded. It helps the airline with more capacity, return of costly leases, and aids both topline and bottomline growth." The Mumbai-Delhi route accounts for a third of India's air passenger movement.

Revenues from putting these planes back in the skies will be much more than penalties Indigo gets from Pratt & Whitney, Dixit said.“While IndiGo is getting some compensation from the engine-maker, amount of which is undisclosed, it is not enough to cover up for revenue losses."

Once the replacements are completed, IndiGo will be nearly free of Pratt & Whitney's geared turbine fan (GTF) engines, marking a gradual closure of one of the Gurugram-based airline's longest-running operational challenges.

The crisis, which began in mid-2023, stems from a“powder metal contamination" defect in certain Pratt & Whitney GTF engines that could lead to component cracking. The issue has affected airlines worldwide.

Although IndiGo's exposure to the American engine maker is declining as all its new plane inductions are powered by rival CFM, a 50:50 venture of Safran Aircraft Engines and General Electric, there are some 100 Pratt & Whitney-powered Airbus A320neo family aircraft in its fleet of 417 planes. CFM is today the world's largest commercial engine maker.

IndiGo, owned by InterGlobe Aviation Ltd, has leased 333 passenger jets on so-called operational leases, which are expensive as they come loaded with costs such as maintenance and insurance. These include replacements for the grounded planes with Pratt & Whitney engines. Of the remaining planes on its fleet, 14 planes are owned by the airline and 62 on financial lease where maintenance, insurance and others costs are borne by IndiGo. Eight were on so-called damp leases where the lessor provides not just the jets but also pilots, maintenance and insurance.

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The number of grounded IndiGo aircraft peaked in 2024 at around 70-80 and has since gradually declined.

On IndiGo's 4 November investor call after its second quarter earnings, chief financial officer Gaurav Negi had said the number of grounded aircraft has remained stable in the“range of 40s".“Based on the latest guidance from the OEM [Pratt & Whitney], the number of grounded aircraft is expected to remain range-bound at current levels till the end of the year. Beyond this, we are in active discussions with the OEM for further guidance," he had said.

“While we remain on track to receive one aircraft per week from our original order book, the grounding situation has not eased as swiftly as anticipated," Negi told investors.

Pratt & Whitney had indicated the fast pace of repair work of its engines earlier. In an earnings call in October, chairman and chief executive officer of the engine-maker's parent RTX Christopher Calio stated that GTF's repair network performance had strengthened.“Our repair network was up about 30% year-over-year, which helps lessen demand for new parts and improves flow earlier in the process," he said.“We exited the quarter with roughly 80% of GTF MRO completions averaging a 110-day turnaround time, even on heavier work scopes."

Among Indian carriers, IndiGo remains the only airline with a grounded fleet due to Pratt & Whitney engine issues. SpiceJet and Tata-owned Air India, including Air India Express, no longer have any grounded aircraft linked to its engines.

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GoFirst, which has ceased operations, blamed the engine manufacturer in 2023 during its bankruptcy proceedings.

Some analysts, for now, continue to underline the slow progress on resolving the issue of grounded airlines.

“AoG (Aircraft on Ground) is not easing as quickly as anticipated and is expected to remain range-bound in the 40s," Nuvama analysts Jal Irani, Tanay Kotecha and Akshay Mane wrote in a note dated 5 November.“[P]rogress on reduction in aircraft on ground (currently in 40s) has stalled; the existing level is likely to continue until the end of FY26, likely to result in single-digit % rise in CASK ex-fuel (from ₹3.91 in September quarter ending) due to the impact of increased damp leases part offset by compensation from OEM (P&W),"

CASK is the cost of operating one seat for an airline, a key metric in the business.

Shares of InterGlobe Aviation were at around ₹5,575 on morning trades.

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