IndiGo, known for its long-standing association with Airbus, is now incorporating Boeing 737 MAX 8 aircraft into its fleet through wet-lease agreements. The first two aircraft, sourced from Turkish carrier Corendon Airlines, landed in Delhi from Antalya on Sunday, with more expected to arrive later this month. This marks a notable shift for the airline, which traditionally operates Airbus aircraft.
Corendon Airlines, a Turkish carrier with sister companies in the Netherlands and Malta, is familiar with Indian skies. It has previously operated flights in India through arrangements with SpiceJet. The MAX 8 aircraft brought in by IndiGo have a seating capacity of 189, differing from IndiGo’s standard Airbus configurations of 180 or 186 seats.
Record-Breaking November for Indian Aviation
November proved to be a landmark month for Indian aviation, recording the highest-ever domestic passenger traffic. IndiGo benefited significantly, carrying over 10 million passengers in a single month for the first time in its history. Despite this achievement, the airline faces mounting competition, particularly from Air India Express, the low-cost subsidiary of Air India.
Competition and Challenges
Air India Express has been leveraging its parent company’s resources, including aircraft and routes, to compete aggressively with IndiGo. This shift is putting pressure on IndiGo’s market dominance, particularly on routes where it previously held a monopoly. Unlike the mainline Air India, Air India Express operates with a lower cost structure, enabling it to compete more effectively on pricing.
IndiGo’s operational capacity continues to be constrained by engine issues affecting over 50 of its aircraft powered by Pratt & Whitney engines. To mitigate these challenges, IndiGo has turned to wet-leasing aircraft, including two Boeing 777s from Turkish Airlines for international routes and six MAX 8s from Qatar Airways operating to Doha.
Historical Context and Current Strategy
IndiGo’s first experience with wet-leasing was in 2017 when it brought in four aircraft from Lithuanian carrier Small Planet Airlines due to delays in deliveries of Pratt & Whitney-powered A320neo aircraft. The current situation mirrors that scenario, with grounded planes necessitating the addition of leased aircraft to maintain operations.
While the wet-leased MAX 8 aircraft will primarily serve domestic routes, they introduce logistical challenges, such as staff training and potential customer confusion due to differences in seating configurations. However, IndiGo appears to prioritize capacity expansion over these concerns, bolstered by its strong financial position.
Market Dynamics and Future Outlook
The Indian aviation market has been grappling with a shortage of aircraft. IndiGo’s wet-leasing strategy not only addresses its immediate capacity needs but also prevents competitors from acquiring the same aircraft. For SpiceJet, wet-leasing is often a necessity due to financial constraints, while IndiGo utilizes it as a strategic tool to negotiate better terms and compensation for grounded planes.
IndiGo’s financial performance for Q3 FY25, expected to be announced by mid-February, will reveal the effectiveness of these strategies. Analysts anticipate the airline to post a profit, potentially matching its previous highs.
The wet-leased Boeing 777s are already painted in IndiGo’s livery, while the Qatar Airways MAX 8s feature decals instead of a full repaint, suggesting shorter-term leasing. Whether these aircraft signal a long-term integration of Boeing narrow-body planes into IndiGo’s fleet remains to be seen.