IndiGo parent's shares drop after airline warns of more groundings

Shares of IndiGo fell 1.5% on Wednesday after the airline warned that more planes could be grounded due to the latest troubles with Pratt & Whitney engines, leading to the potential withdrawal of nearly a quarter of its fleet.

India's top airline, listed as Interglobe Aviation, said late on Tuesday it sees groundings of its Airbus in the range of "mid-thirties" due to a powder metal issue, days after it said about 40 planes were pulled out of service for a separate problem with the engines.

Both combined would add up to about a quarter of its total fleet of 334 planes - a large number of which are fitted with Pratt engines. The troubles come at a time when India's air travel market is rapidly growing.

India saw a 29% rise in domestic passenger numbers in September from a year ago, and airlines like IndiGo and Air India stand to gain the most with smaller rivals like Go Air facing bankruptcy and upstart Akasa Air contending with a pilot shortage.

IndiGo, however, reiterated it would meet its capacity growth targets by leasing more planes from the secondary market and extending leases on existing jets. The airline plans to grow its capacity in the "north of mid-teens" by the end of this fiscal year and expects to double in size by 2030.

The company's shares hit an intra-day low of 2,598 rupees in early trading but reversed course around mid-day to trade up 0.5%.

Pratt & Whitney parent RTX said in July a rare powder metal defect could lead to the cracking of some engine components in the twin-engine Airbus A320neo, and called for accelerated inspections.