**Indian Aviation Industry Faces Major Disruptions Amid Supply Chain Issues**
The Indian aviation sector is currently grappling with significant disruptions stemming from ongoing supply chain challenges and engine-related problems, as highlighted in a recent report by credit rating agency ICRA. These issues have severely affected airlines’ operational capacity, resulting in increased costs and operational delays.
The report indicates that the industry is struggling with supply chain difficulties and engine failures, particularly concerning Pratt and Whitney (P&W) engines supplied to various airlines. Go Airlines (India) Limited has been notably impacted, having grounded nearly half of its fleet in FY2024 due to defective engines. The National Company Law Tribunal (NCLT) ultimately ordered the airline’s liquidation in January 2025.
Another major player, InterGlobe Aviation Limited (IndiGo), reported that approximately 60-70 aircraft were grounded as of January 30, 2025, due to issues such as powder metal contamination, a defect in the materials used for engine components. By March 2025, around 133 aircraft from select Indian airlines were grounded, representing nearly 16% of the total fleet. While this figure is an improvement from the 154 grounded aircraft reported on September 30, 2023, it still poses a significant challenge to the industry’s capacity.
These capacity constraints have adversely affected the available seat kilometer (ASKM), a crucial metric for measuring airline capacity. The global recall of P&W engines, coupled with delays in testing by the manufacturer, has exacerbated the situation. In response, airlines have been compelled to lease additional aircraft, primarily through wet leasing arrangements, to compensate for the grounded fleet. This has led to increased lease rentals and operating costs, while also diminishing fuel efficiency, particularly as some replacement aircraft are older models acquired on short-term leases.
Despite these challenges, the industry has experienced some relief from favorable ticket pricing, high passenger load factors (PLF), and partial compensation from engine manufacturers, which have helped mitigate the financial strain to some extent. However, operational difficulties in FY2025 have been compounded by staff shortages, especially among pilots and cabin crew, resulting in frequent flight delays and cancellations that further impact capacity and inconvenience passengers.
While some improvements are anticipated in FY2026, the Indian aviation sector continues to face multiple challenges that hinder its efficiency and profitability.
**FAQ**
**What are the main challenges currently facing the Indian aviation industry?**
The Indian aviation industry is primarily facing challenges related to supply chain disruptions, engine failures, staff shortages, and increased operational costs, which have collectively impacted its capacity and profitability.
