IndiGo to receive compensation from Pratt & Whitney for engine issues
IndiGo secures compensation from Pratt & Whitney for engine issues, leading to the grounding of over 70 aircraft
InterGlobe Aviation, the operator of IndiGo, announced on Friday that it will receive compensation from Pratt & Whitney through its affiliate for powder metal issues that have grounded some of its aircraft.
The company did not disclose the amount of the compensation, stating that it will be received through the Pratt & Whitney affiliate, International Aero Engines.
The stocks of InterGlobe Aviation closed in red, down 0.79 per cent at ₹4267.10, on June 14, on BSE. The company enjoys a market capitalisation of ₹1,64,701.39 crore as per BSE. The company had hit a 52-week high of ₹4,609.80 on June 10, 2024, currently down by over 7 per cent.
"This is in continuation to our disclosure dated 7 November, 2023 (Ref-IGAL/SECT/11-23/11) filed under Regulation 30 of SEBI LODR Regulations in relation to preliminary impact assessment of Pratt & Whitney powder metal issue, resulting in removal of higher number of engines from service and grounded for inspection and replacement," the company said in an exchange filing.
On June 14, 2024, InterGlobe Aviation Limited ('IndiGo') finalized an amendment to the existing agreement with International Aero Engines, LLC ("IAE"), an affiliate of Pratt & Whitney. According to the company, "IAE will provide IndiGo with a customized compensation in relation to the ongoing situation of Aircraft on Ground due to unavailability of engines."
Currently, over 70 IndiGo aircraft are grounded due to issues with Pratt engines. More than 30 of these aircraft are affected by a powder metal defect, while the remaining are impacted by older issues, as per various media reports.
In July last year, Pratt & Whitney reported that a rare powder metal defect could cause cracking in some engine components of the twin-engined Airbus A320neo, necessitating accelerated inspections. These checks are expected to result in the grounding of 600-700 Airbus jets between 2023 and 2026.