Aircraft deliveries to domestic airlines are expected to face disruptions due to supply chain challenges experienced by aircraft and engine manufacturers, as per a report released on Wednesday. In its findings, credit rating agency Icra stated that Indian airlines have a total order book of approximately 1,700 aircraft, which is more than twice the size of the current fleet.
Icra identified supply chain challenges and engine failure issues as the primary obstacles in the short term, as outlined in its mid-term outlook on the domestic aviation industry.
The report stated, “The deliveries, however, are likely to be gradual, spanning over the next decade and will also be impacted by the current supply chain challenges encountered by engine and aircraft Original Equipment Manufacturers (OEMs).”
India stands as one of the fastest-growing civil aviation markets, with a surge in domestic air traffic. Airlines have undertaken ambitious expansion plans to meet the rising travel demand.
Since February of the previous year, Akasa Air, Air India and IndiGo collectively have made orders for 1,120 planes.
In January of the current year, Akasa Air placed an order for 150 Boeing 737 Max planes. In 2023, Air India and IndiGo placed orders for 970 planes with Boeing and Airbus.
Air India, under the Tata Group ownership, ordered 470 planes—250 from Airbus and 220 from Boeing—in February of the previous year. Subsequently, in June, IndiGo, the country’s largest airline, announced an order with Airbus to purchase 500 narrow-body planes.
However, Boeing is grappling with issues related to its 737 Max aircraft, while engine maker Pratt & Whitney is encountering problems with its engines.
According to Icra, a significant portion of the 1,700 aircraft order book is focused on replacing old aircraft with new, fuel-efficient ones.
“More recently, the Indian aviation industry has been affected by engine failures and supply chain challenges. This has resulted in the grounding of aircraft for select airlines, thereby impacting overall industry capacity (as measured by Available Seat Kilometres or ASKMs),” commented Suprio Banerjee, Vice President and Sector Head for Corporate Ratings, Icra.
