IndiGo to receive Airbus A320neo from this month, to induct 24 planes till next March

Airline gives profit warning for Q4, says profit will be impacted due to rupee depreciation

IndiGo will receive its first Airbus A320neo aircraft this month and will induct 24 planes of the type till March 2017, the airline announced today.

This announcement signals resolution of engine-related issues with the aircraft, which had delayed the delivery of planes. IndiGo has 430 A320neo on order and was originally scheduled to receive its first aircraft last December. The airline had then said the delay was due to "industrial reasons."

Additionally, the airline has decided to lease seven used A320 planes, which will be inducted in fleet between March and November 2017. Currently, the airline has 102 Airbus A320s.

The airline said that the air travel market in India has continued to grow at one of the highest rates in the world. 

During the last twelve months ended January 31, 2016, total domestic passengers in India increased by 21% and, for the same period, total passengers served by IndiGo increased by 35.5%.

Also, in the fourth quarter of fiscal year 2016, while year-over-year capacity is expected to grow by about 19%, EBITDAR margins are expected to be strong at around 35% 

to 37% and at last year’s levels. However, for the fourth quarter, year-over-year revenue is expected to increase by 6% to 8% and net profit will also be impacted due to the exchange rate movement in the Indian Rupee versus the US Dollar.

For fiscal 2017, total fleet strength is expected to increase by about 22.4% on a year-over-year basis allowing IndiGo to absorb the additional manpower in its operations that were hired in expectation of taking delivery of 9 A320neo aircraft between December 2015 and March 2016, IndiGo said.

“With the resolution of the delivery of A320neos, IndiGo expects to continue with its strong operating performance, growth in profitability and healthy cash generation. India remains one of the most underpenetrated aviation markets in the world. The combination of our unique structural cost advantages, superb product quality and large fuel efficient aircraft orders, would enable us to deliver superior financial performance for a long period of time," IndiGo president Aditya Ghosh said in a statement.