IndiGo has announced that Airbus has confirmed that it will deliver 24 fuel efficient A320neo aircraft by March 2017 as compared to the original plan to deliver 26 A320neos.
“The new A320neo powered by Pratt and Whitney’s fuel efficient geared turbo fan engines will enable us to structurally reduce our costs as fuel continues to be the single largest element of our cost structure. This also marks the beginning of the next phase of our growth and will enable us to make air transportation more accessible Indians,” said Aditya Ghosh, president and director, IndiGo.
The aviation market in India has continued to grow at one of the highest rates in the world. During the last 12 months ended, total domestic passengers in India increased by 21.0 per cent, and for the same period, total passengers served by IndiGo increased by 35.5 per cent. To address this demand, IndiGo has also entered into leases for seven used A320 aircraft which will be inducted between March and November, 2016. Overall, on a year-on-year basis, IndiGo expects to grow its fleet by 13 aircraft in the Q4 of fiscal year 2016, followed by year-on-year increase of 11 aircraft in Q1, 21 aircraft in Q2, 27 aircraft in Q3, and 24 aircraft in Q4 of fiscal year 2017.
Also in Q4 2016, while year-on-year capacity is expected to grow by about 19 per cent, EBITDAR margins are expected to be strong at around 35 per cent to 37 per cent and at last year’s levels. However, year-on-year revenue is expected to increase by six per cent to eight per cent. For fiscal 2017, total fleet strength is expected to increase by about 22.4 per cent on a year-on-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.
