IndiGo signs $20bn jet engine deal with CFM

Indian budget airline IndiGo has ordered 600 jet engines with a list price of $20bn from CFM International in a deal that reflects soaring regional demand for air travel and represents a snub to existing supplier Pratt & Whitney. The engines will power 280 Airbus A320neo and A321neo jetliners ordered by IndiGo, India’s clear market leader. CFM International, a joint venture between General Electric of the US and Safran of France, won the order even though IndiGo has an existing relationship with Pratt & Whitney, owned by United Technologies Corporation. India is home to one of the world’s fastest-growing aviation markets, with its airlines emerging as key customers for Boeing and Airbus as more of the country’s 1.3b people begin to fly. The carrier had placed an order for 430 Airbus planes, of which the first 150 aircraft are to be powered by engines supplied by Pratt & Whitney. The decision to switch to CFM for the next batch follows months of highly publicised troubles with the Pratt & Whitney engine in India. IndiGo and GoAir, another budget carrier, have had to ground flights in the past because of troubles with the engines. The glitches prompted India’s aviation watchdog Directorate General of Civil Aviation (DGCA) to issue an additional safety protocol directive to the airlines regarding the engines in January. Yet experts did not link the engine troubles with the lost bid. “In the engines business, such big opportunities don’t exist all that often,” said Thomas Jaeger, chief executive at ch-aviation. “It could be that CFM just made a better offer.”<br/>