India's Aviation Sector Faces Unprecedented Challenges

India's aviation industry is currently navigating through turbulent times, with supply chain disruptions and engine-related issues causing significant operational hurdles. A recent ICRA report highlights the severity of these challenges, pointing to a global recall of Pratt & Whitney engines and testing delays as primary culprits.

IndiGo and Go Airlines Among the Hardest Hit

The report singles out IndiGo and Go Airlines as some of the most affected carriers. IndiGo has grounded nearly 70 aircraft due to defects in engine part materials, while Go Airlines faced liquidation in January 2025, with nearly half of its fleet grounded in FY2024 due to faulty engines.

Operational and Financial Strains

With 133 aircraft out of service in March 2025, representing 16% of the total fleet, the industry's capacity and functioning are under severe strain. Airlines are resorting to wet lease arrangements to compensate, driving up costs and reducing fuel efficiency.

Despite these challenges, strong ticket pricing, high passenger load factors, and partial compensation from engine manufacturers have provided some financial relief. However, staff shortages, especially pilots and cabin crew, have led to further operational difficulties, causing delays and cancellations.

Looking Ahead

While some recovery is anticipated in FY2026, the sector continues to grapple with multiple challenges that threaten its operational efficiency and profitability. The road to recovery appears fraught with obstacles, underscoring the need for strategic interventions.