IndiGo picks Pratt & Whitney rival CFM for LEAP1-A engines, deal soon

IndiGo, the largest customer of Airbus’ fuel-efficient A320neo family aircraft with Pratt & Whitney (P&W) engines, is learnt to have decided on rival CFM International for LEAP1-A engines. The airline is looking at an order for 280 aircraft. IndiGo’s move to shift to CFM, a 50:50 joint venture between the US’ General Electric and French engine maker Safran, follows a series of issues, including the grounding of planes due to trouble with P&W engines.

IndiGo’s deal with CFM could be announced during the Paris Air Show to be held from June 17 to 23, sources in the know said. The deal is valued at $8.12 billion, according to the listed price. But airlines pay far less than what the listed price is.

IndiGo’s decision to go for CFM is seen as a big blow for P&W’s geared turbo fan engine programme, which is the only other option besides CFM’s LEAP1-A for the A320neo family.

Charles Soret, a CFM spokesperson, while refusing to respond to queries on the deal citing client confidentiality, said the engine maker was looking to strengthen its position in the Indian subcontinent by winning customers for the LEAP engine. “As of today, 57 LEAP-powered aircraft are operated by Indian airlines and several hundreds of LEAP engines will be delivered in the coming years to cover the needs of Indian market,” Soret said.

IndiGo, with 50 per cent share of domestic aviation market, is the largest customer for A320neo family with an order book of 430 aircraft placed in two tranches—182 aircraft in 2011 and 250 in 2015. The airline had chosen Pratt for the first 150 aircraft out of which 85 have been delivered. IndiGo refused to comment. Since induction in 2016, Pratt & Whitney engines have faced multiple issues primarily due to design flaws that have grounded planes, delayed deliveries and prompted hundreds of millions of dollars in compensation claims.

Operational problems stretched from long engine start-up times delaying turnaround of aircraft, problems with seal of the engine and durability issues with the turbine blades. The situation became complex in March 2018 when aviation regulator DGCA grounded 11 A320neos including eight of IndiGo. 

The regulator stepped up scrutiny on the turbines leading to higher removal of engines. This caused a shortage of spare engines, forcing planes to be grounded till October last year. Induction of IndiGo’s long range A321neos, for use on international routes, were also delayed as Pratt has been retrofitting the engines with more durable turbine blades. Pratt & Whitney didn’t comment on the issue. However, the company during its first-quarter earnings call in April had said shipments engines had more than doubled year on year in Q1. “Pratt’s GTF engine has been fantastic for operators in terms of fuel efficiency, reducing fuel burn by almost 16 per cent. But A320neo operators across the world feel the stabilisation period for this engine has taken far longer than initially promised. Since there is an option, airlines will naturally explore that,” said an industry source.

Airline executives pointed out that in such deals, engine manufactures typically compete by giving more lucrative offers. “This is a binary competition where the airline has to choose either Pratt or CFM. With IndiGo being a bulk customer, CFM must have given them a very lucrative offer in order to win the deal. Once you get the airline as customer, you are assured of years of after-sales maintenance and services,” the executive said.

Philippe Couteaux, Executive Vice-president, sales and marketing at CFM, had earlier indicated the manufacturer was in talks with IndiGo for the order. “We see an opportunity in the Indian market. IndiGo has known CFM for years. Now whether the airline wants to place an order is its prerogative," Couteaux had said.