India's airlines are facing a “crisis” that could result in a quarter of the sector's fleet grounded by March next year because of supply chain problems delaying replacement plane engines, according to analysts.
It is a critical time for the industry, as the country's airlines focus on increasing profitability and capitalising on rising travel demand as the sector continues to recover from the coronavirus pandemic.
“India's fragile aviation ecosystem can't afford for the supply chain issues to be more severe,” says Kapil Kaul, chief executive and director of aviation consultancy Capa India.
“That could see the situation evolve from an airline risk to an industry risk.”
By March 31, Capa forecasts that up to 200 aircraft will be grounded in India, from more than 160 planes now.
This is expected to result in constrained capacity, leading to more flight cancellations and delays and a “crisis situation”, Mr Kaul says.
The issue comes as India's aviation sector, like those of many other countries, is still recovering from the impact of the pandemic, as well as dealing with other challenges, such as rising competition and high taxes.
Combined, India's airlines reported losses of $6 billion between April 2020 and March 2023, according to Capa. This financial year, the consultancy projects that Indian airlines will incur losses of between $1.6 billion and $1.8 billion.
Demand for travel in India has been soaring since pandemic restrictions were eased. The country's aviation industry handled about 200 million passengers in the financial year to the end of March 2023.
Domestic air traffic in India increased by 9 per cent year-on-year last month to reach 12.7 million passengers, according to data released by the country's Directorate General of Civil Aviation.
Mumbai's international airport reported its highest monthly passenger traffic at 4.46 million last month, an increase of 13 per cent compared with the same period last year.
A significant issue is the challenge in the global supply chain for spare parts and services from engine suppliers, analysts said.
Although it is a challenge faced by airlines worldwide, Capa says India is especially vulnerable because it has a high proportion of narrowbody planes in its fleet – and these are the aircraft primarily affected by engine issues.
“The expected [increased] grounding of India's fleet is concerning,” says Manish Chowdhury, head of research at StoxBox.
The situation is expected to worsen despite other carriers such as Air India, Indigo and Akasa Air expected to add about 150 planes collectively in the next 12 months, Mr Chowdhury says.
“We believe that the capacity addition is not enough to cater to the increasing air traffic and would result in airfares remaining high in the near future,” he says.
“Additionally, the grounding of aeroplanes would create a shortage of parking bays.”
The situation impacts several airlines, including IndiGo, India's largest by fleet size.
It has been forced to ground dozens of planes because of issues with US manufacture maker Pratt & Whitney's engines, as replacements are needed.
In July, another problem surfaced: a rare powder metal defect that could cause cracking of some engine components in the twin-engine Airbus A320neo planes.
This means that inspections will have to be carried out on these aircraft. Capa forecasts that 90 IndiGo planes will be grounded by the end of March, up from 50 to 60 now.
To manage the situation, IndiGo has been leasing planes to meet demand and remain on its growth path.
During the airline's latest earnings call last month, Gaurav Negi, IndiGo's chief financial officer, said it had received further communication from Pratt & Whitney over the powder metal issues.
“We understand that a large number of ... engines are being removed for shop visits between 2023 and 2026 and a majority of these incremental engine removals are planned for 2023 and early 2024,” Mr Negi said.
“Our current estimates indicate that these accelerated removals and incremental shop visits will further adversely impact our operating fleet from the fourth quarter onwards, which is post-January 1, 2024, and would lead to a higher number of groundings.”
Aside from leasing more aircraft to overcome the issue, the airline is also using some of its older aircraft. At the same time, it expects leasing costs to be offset by growing demand and the limited capacity in India's aviation sector.
“With these mitigation initiatives, we reiterate our financial year 2024 capacity growth guidance of north of mid-teens and we also remain confident in meeting our long-term capacity guidance,” Mr Negi said.
IndiGo's scale and a 60 per cent domestic share that's core to India's connectivity is a critical national asset
Gaurav Negi,
IndiGo's chief financial officer
However, the financial impact on IndiGo will be “severe”, according to Mr Kaul.
“IndiGo's scale and a 60 per cent domestic share that's core to India's connectivity is a critical national asset,” he adds.
“To have so many aircraft grounded, with possibly more in [the next financial year] may have larger economic implications.”
Meanwhile, the financial impact – at a conservative level – is $6 million per aircraft annually, Capa says.
Other airlines are also feeling the heat.
Budget airline Go First's entire fleet of 54 planes is grounded. The carrier filed for bankruptcy in May, blaming Pratt & Whitney for its troubles.
The company said its financial problems were “due to the ever-increasing number of failing engines supplied by Pratt & Whitney”.
It also accused Pratt & Whitney of refusing to supply usable engines under an emergency arbitration award that resulted in cash flow issues. Pratt & Whitney has rejected the allegations.
Another Indian low-cost airline, SpiceJet, is struggling to recover after Boeing's 737 Max planes were grounded globally in 2019. It took two and a half years before the carrier could resume flying 737 Max planes.
“This year, the challenges were further compounded by elevated fuel prices, impacting operational costs,” Ajay Singh, chairman and managing director of SpiceJet, said on Tuesday, as the company announced that its board had approved raising $270 million by selling sales and warrants.
Air India, privatised in January 2022 with its handover to Tata Sons, is also facing supply chain issues, with more than 40 planes short of parts. Capa expects that up to 30 of Air India's planes will be grounded at the end of March.
“2024 will be crucial for the Indian aviation sector, with traffic coming up,” says Khushboo Vaish, senior director at professional services company Alvarez & Marsal.
“Airlines will still be able to meet the demand with re-inductions [of planes] but we might see more operational challenges in terms of network changes and scheduling,” she says.
“There is a healthy recovery in passenger traffic but an uncertain global situation impacting aviation turbine fuel and the exchange rate, along with engine groundings, means 2024 will be an operationally challenging year for the aviation sector.”
More investment in maintenance, repair and overhaul facilities, both within India and globally, could be an effective longer-term solution to easing such problems, analysts say.
Airlines may be able to weather the storm in the coming months with older aircraft, short-term leases and new plane deliveries, but there is still some uncertainty about the outlook beyond that, Ms Vaish says.
“The bigger and more crucial aspect to wait and watch will be how fast engine manufacturers are going to deal with this issue in 2024, as it might have a higher impact in 2025 to 2026,” she says.
HAEMOGLOBIN DISORDERS EXPLAINED
Thalassaemia is part of a family of genetic conditions affecting the blood known as haemoglobin disorders.
Haemoglobin is a substance in the red blood cells that carries oxygen and a lack of it triggers anemia, leaving patients very weak, short of breath and pale.
The most severe type of the condition is typically inherited when both parents are carriers. Those patients often require regular blood transfusions - about 450 of the UAE's 2,000 thalassaemia patients - though frequent transfusions can lead to too much iron in the body and heart and liver problems.
The condition mainly affects people of Mediterranean, South Asian, South-East Asian and Middle Eastern origin. Saudi Arabia recorded 45,892 cases of carriers between 2004 and 2014.
A World Health Organisation study estimated that globally there are at least 950,000 'new carrier couples' every year and annually there are 1.33 million at-risk pregnancies.
Paatal Lok season two
Directors: Avinash Arun, Prosit Roy
Stars: Jaideep Ahlawat, Ishwak Singh, Lc Sekhose, Merenla Imsong
Rating: 4.5/5
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
The%20specs
%3Cp%3E%3Cstrong%3EPowertrain%3A%20%3C%2Fstrong%3ESingle%20electric%20motor%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E201hp%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E310Nm%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3ESingle-speed%20auto%0D%3Cbr%3E%3Cstrong%3EBattery%3A%20%3C%2Fstrong%3E53kWh%20lithium-ion%20battery%20pack%20(GS%20base%20model)%3B%2070kWh%20battery%20pack%20(GF)%0D%3Cbr%3E%3Cstrong%3ETouring%20range%3A%20%3C%2Fstrong%3E350km%20(GS)%3B%20480km%20(GF)%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh129%2C900%20(GS)%3B%20Dh149%2C000%20(GF)%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%3C%2Fstrong%3E%20Now%3C%2Fp%3E%0A
Killing of Qassem Suleimani
The%20Genius%20of%20Their%20Age
%3Cp%3EAuthor%3A%20S%20Frederick%20Starr%3Cbr%3EPublisher%3A%20Oxford%20University%20Press%3Cbr%3EPages%3A%20290%3Cbr%3EAvailable%3A%20January%2024%3C%2Fp%3E%0A
SPEC%20SHEET
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The candidates
Dr Ayham Ammora, scientist and business executive
Ali Azeem, business leader
Tony Booth, professor of education
Lord Browne, former BP chief executive
Dr Mohamed El-Erian, economist
Professor Wyn Evans, astrophysicist
Dr Mark Mann, scientist
Gina MIller, anti-Brexit campaigner
Lord Smith, former Cabinet minister
Sandi Toksvig, broadcaster
Federer's 19 grand slam titles
Australian Open (5 titles) - 2004 bt Marat Safin; 2006 bt Marcos Baghdatis; 2007 bt Fernando Gonzalez; 2010 bt Andy Murray; 2017 bt Rafael Nadal
French Open (1 title) - 2009 bt Robin Soderling
Wimbledon (8 titles) - 2003 bt Mark Philippoussis; 2004 bt Andy Roddick; 2005 bt Andy Roddick; 2006 bt Rafael Nadal; 2007 bt Rafael Nadal; 2009 bt Andy Roddick; 2012 bt Andy Murray; 2017 bt Marin Cilic
US Open (5 titles) - 2004 bt Lleyton Hewitt; 2005 bt Andre Agassi; 2006 bt Andy Roddick; 2007 bt Novak Djokovic; 2008 bt Andy Murray
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
COMPANY%20PROFILE
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Tips to stay safe during hot weather
- Stay hydrated: Drink plenty of fluids, especially water. Avoid alcohol and caffeine, which can increase dehydration.
- Seek cool environments: Use air conditioning, fans, or visit community spaces with climate control.
- Limit outdoor activities: Avoid strenuous activity during peak heat. If outside, seek shade and wear a wide-brimmed hat.
- Dress appropriately: Wear lightweight, loose and light-coloured clothing to facilitate heat loss.
- Check on vulnerable people: Regularly check in on elderly neighbours, young children and those with health conditions.
- Home adaptations: Use blinds or curtains to block sunlight, avoid using ovens or stoves, and ventilate living spaces during cooler hours.
- Recognise heat illness: Learn the signs of heat exhaustion and heat stroke (dizziness, confusion, rapid pulse, nausea), and seek medical attention if symptoms occur.
Defence review at a glance
• Increase defence spending to 2.5% of GDP by 2027 but given “turbulent times it may be necessary to go faster”
• Prioritise a shift towards working with AI and autonomous systems
• Invest in the resilience of military space systems.
• Number of active reserves should be increased by 20%
• More F-35 fighter jets required in the next decade
• New “hybrid Navy” with AUKUS submarines and autonomous vessels
The specs: 2019 Jeep Wrangler
Price, base: Dh132,000
Engine: 3.6-litre V6
Gearbox: Eight-speed automatic
Power: 285hp @ 6,400rpm
Torque: 347Nm @ 4,100rpm
Fuel economy, combined: 9.6L to 10.3L / 100km
Jordan cabinet changes
In
- Raed Mozafar Abu Al Saoud, Minister of Water and Irrigation
- Dr Bassam Samir Al Talhouni, Minister of Justice
- Majd Mohamed Shoueikeh, State Minister of Development of Foundation Performance
- Azmi Mahmud Mohafaza, Minister of Education and Minister of Higher Education and Scientific Research
- Falah Abdalla Al Ammoush, Minister of Public Works and Housing
- Basma Moussa Ishakat, Minister of Social Development
- Dr Ghazi Monawar Al Zein, Minister of Health
- Ibrahim Sobhi Alshahahede, Minister of Agriculture and Minister of Environment
- Dr Mohamed Suleiman Aburamman, Minister of Culture and Minister of Youth
Out
- Dr Adel Issa Al Tawissi, Minister of High Education and Scientific Research
- Hala Noaman “Basiso Lattouf”, Minister of Social Development
- Dr Mahmud Yassin Al Sheyab, Minister of Health
- Yahya Moussa Kasbi, Minister of Public Works and Housing
- Nayef Hamidi Al Fayez, Minister of Environment
- Majd Mohamed Shoueika, Minister of Public Sector Development
- Khalid Moussa Al Huneifat, Minister of Agriculture
- Dr Awad Abu Jarad Al Mushakiba, Minister of Justice
- Mounir Moussa Ouwais, Minister of Water and Agriculture
- Dr Azmi Mahmud Mohafaza, Minister of Education
- Mokarram Mustafa Al Kaysi, Minister of Youth
- Basma Mohamed Al Nousour, Minister of Culture
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
Zayed%20Centre%20for%20Research
%3Cp%3EThe%20Zayed%20Centre%20for%20Research%20is%20a%20partnership%20between%20Great%20Ormond%20Street%20Hospital%2C%20University%20College%20London%20and%20Great%20Ormond%20Street%20Hospital%20Children%E2%80%99s%20Charity%20and%20was%20made%20possible%20thanks%20to%20a%20generous%20%C2%A360%20million%20gift%20in%202014%20from%20Sheikha%20Fatima%20bint%20Mubarak%2C%20Chairwoman%20of%20the%20General%20Women's%20Union%2C%20President%20of%20the%20Supreme%20Council%20for%20Motherhood%20and%20Childhood%2C%20and%20Supreme%20Chairwoman%20of%20the%20Family%20Development%20Foundation.%3C%2Fp%3E%0A
more from Janine di Giovanni
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
From Europe to the Middle East, economic success brings wealth - and lifestyle diseases
A rise in obesity figures and the need for more public spending is a familiar trend in the developing world as western lifestyles are adopted.
One in five deaths around the world is now caused by bad diet, with obesity the fastest growing global risk. A high body mass index is also the top cause of metabolic diseases relating to death and disability in Kuwait, Qatar and Oman – and second on the list in Bahrain.
In Britain, heart disease, lung cancer and Alzheimer’s remain among the leading causes of death, and people there are spending more time suffering from health problems.
The UK is expected to spend $421.4 billion on healthcare by 2040, up from $239.3 billion in 2014.
And development assistance for health is talking about the financial aid given to governments to support social, environmental development of developing countries.
Company: Instabug
Founded: 2013
Based: Egypt, Cairo
Sector: IT
Employees: 100
Stage: Series A
Investors: Flat6Labs, Accel, Y Combinator and angel investors
First Person
Richard Flanagan
Chatto & Windus
THE SPECS
Touareg Highline
Engine: 3.0-litre, V6
Transmission: 8-speed automatic
Power: 340hp
Torque: 450Nm
Price: Dh239,312
