GURUGRAM- IndiGo Airlines (6E), India’s largest carrier, plans to add six Boeing 737 MAX aircraft to its fleet. The airline will lease these planes from Qatar Airways (QR), its codeshare partner.
IndiGo will use these aircraft mainly for flights to and from Doha (DOH), Qatar’s capital. This move helps IndiGo address its current aircraft shortage due to engine problems and supply chain issues.
IndiGo Leases 6 737 MAX from Qatar Airways
The deal marks IndiGo’s first use of narrowbody Boeing planes. Until now, IndiGo’s narrowbody jet fleet consisted only of Airbus A320 family aircraft. The airline also operates ATR turboprops for shorter routes and two Boeing 777s leased from Turkish Airlines (TK).
IndiGo uses the 777s exclusively for flights between India and Istanbul (IST). The arrangement with Qatar Airways will function similarly to IndiGo’s deal with Turkish Airlines. Qatar Airways owns nine Boeing 737 MAX aircraft in total.
After this agreement, IndiGo will operate six of these nine planes. This lease deal highlights the growing partnership between IndiGo and Qatar Airways. It also shows IndiGo’s strategy to maintain its flight schedule despite aircraft shortages.
70 Airbus Plane Grounded
Gaurav Negi, IndiGo’s chief financial officer, announced this during a recent investor call. The airline awaits regulatory approval for this move. IndiGo currently faces significant operational challenges.
Over 70 of its aircraft are grounded. As of June 30, IndiGo’s fleet totaled 382 planes, mostly Airbus A320 family aircraft. To address these issues, IndiGo implements several strategies. The airline keeps older planes it planned to retire, extends leases on some aircraft, and seeks additional leased planes.
The Qatar Airways deal aims to free up six of IndiGo’s aircraft for other routes. Negi explained the operational structure of this agreement. The leased Boeing 737 MAX planes will operate similarly to IndiGo’s current Boeing 777s from Turkish Airlines.
Qatar Airways will provide the aircraft, cockpit crew, maintenance, and insurance. IndiGo will train its cabin crew for the new aircraft type. This arrangement, known as ACMI (aircraft, crew, maintenance, and insurance), places most responsibilities on Qatar Airways.
How Qatar Airways will Benefit from this Deal?
Qatar Airways gains significant advantages from its deal with IndiGo. The air services agreement between India and Qatar limits each country’s airlines to 25,000 seats per week. Qatar Airways has already used its full seat quota.
This IndiGo partnership allows Qatar Airways to increase its revenue from Indian operations. The airline achieves this without using its own seat allocation. Instead, the flights will count towards IndiGo’s quota.
This arrangement cleverly bypasses the bilateral agreement’s restrictions. It allows Qatar Airways to expand its presence in the Indian market indirectly. The deal showcases creative problem-solving in international aviation agreements.
Q1 Results
InterGlobe Aviation, IndiGo’s operator, reports a profit of Rs 2,736 crore for Q1 FY24-25. This marks an 11.5% decrease from last year’s Rs 3,090.6 crore profit. IndiGo’s revenue rises 17.3% to Rs 19,570 crore, up from Rs 16,683.1 crore in Q1 FY24.
The airline’s profit drop stems from increased fuel costs. Aircraft fuel expenses surge 22.7% to Rs 6,416.5 crore in Q1 FY25. ATF prices in April 2024 reached Rs 100,893.63 per kiloliter, 2.6% higher than April 2023. June 2024 jet fuel prices hit Rs 94,969.01 per kiloliter, up 6.34% from June 2023.
IndiGo carried 245.33 lakh domestic passengers in Q1 FY24-25, a 4.8% increase year-over-year. This passenger growth boosts IndiGo’s market share to 61%, up from 60.7% in Q1 FY23-24.
What are your thoughts on IndiGo’s move to lease Qatar’s 737 MAX? Let us know your thoughts in the comment section.
IndiGo Airlines is wet-leasing Boeing 737 MAX from Qatar Airways as many of its aircraft are grounded due to engine issues.
IndiGo is a low-cost carrier and operates mainly Airbus narrowbody aircraft to save on maintenance, crew training, and other expenses.
IndiGo and Qatar Airways have a codeshare agreement and IndiGo operates 10 daily flights to Doha, Qatar which help passenger transit to 160 Destinations of Qatar Airways.
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