IndiGo signs $20 billion engine deal

After nearly two years of heartburn, India’s largest airline IndiGo has decided to dump Pratt & Whitney, whose engines currently power the airline’s fleet of Airbus A320neo aircraft.

On Monday, IndiGo announced that it has ordered CFM International LEAP-1A engines to power the remaining 280 A320neo and A321neo aircraft that it has on order. The contract, which includes spare engines and an overhaul support agreement, is valued at more than $20 billion, at list price. IndiGo also signed a long-term service agreement to support its new LEAP-1A fleet.

The airline had placed an order for 430 jets in the A320neo family series, of which 150 of them were to be powered by engines manufactured by Pratt & Whitney. As of March, IndiGo operates 71 A320neo and one A321neo aircraft. But ever since the induction of these aircraft began in 2016, IndiGo has faced periodic engine-related issues, which even caused some of its aircraft to be grounded.

CFM International, a 50:50 joint venture between GE and Safran Aircraft Engines, is one the largest engine suppliers to the A320neo series of aircraft. According to a report by aviation consultancy firm CAPA last year, “CFM accounts for 56% of all A320neo family engine orders.”

IndiGo said that it would take delivery of it’s first LEAP-1A-powered A320neo in 2020. “We are pleased to partner with CFM for our next batch of Airbus A320neo and A321neo aircraft,” said Riyaz Peermohamed, chief aircraft acquisition and financing officer of IndiGo.

“The CFM LEAP engine will allow IndiGo to maintain its strong focus on lowering operating costs and delivering fuel efficiency with high standards of reliability. This new partnership will allow IndiGo to continue to provide affordable fares to its customers,” added Peermohamed.

CFM has a long-standing footprint in India, with more than 500 CFM56 engines and nearly 60 LEAP engines currently in operation in the country. Air India and Vistara are the two Indian airlines that operate the A320neo aircraft powered by CFM's LEAP engines.

IndiGo, though, has been a CFM customer since 2016 and currently operates a fleet of 17 A320ceo aircraft powered by the CFM56-5B engines.

“We are honoured by IndiGo’s renewed trust in CFM,” said Gaël Méheust, president and CEO of CFM International. “We are fully committed to helping IndiGo optimise its operations by providing them with the industry-leading asset utilisation, fuel efficiency, and overall cost of ownership.”

The LEAP engine has logged nearly five million engine flight hours in less than three years of commercial service. It is one of the fastest selling aircraft engines with more than 17,600 orders and commitments, including spare engines.