IndiGo in talks for big engine order, defying aviation gloom

IndiGo, India’s biggest airline, is in talks with Pratt & Whitney and CFM International for its next batch of jet engine orders, according to people familiar with the matter, a rare sign of dealmaking in a sector that’s been paralyzed by the virus pandemic. The discussions with the rival manufacturers relate to engines that would power about 150 new Airbus SE A320neo jets, the people said, asking not to be identified because the negotiations are private. Talks are preliminary and there’s no timeline on when any agreement may be reached, the people said. Based on the size of IndiGo’s last engine order -- a $20b transaction with CFM that covered 280 planes and was the largest engine order in history -- the new agreement could be worth around $10.7b, including service, repair, and maintenance. The pandemic presents a unique opportunity, however, for IndiGo to potentially bargain with the engine makers, both of which it now counts as suppliers. “This is the perfect time to engage given the overall market conditions and state of competitors -- both of which will enable Indigo to get very lucrative deals,” said Satyendra Pandey, a partner at New Delhi-based advisory AT-TV and a former head of strategy for Go Airlines India. “As this selection is for the remaining aircraft, it involves the long-term performance and cost forecasts.” A representative for IndiGo declined to comment. Operated by InterGlobe Aviation, IndiGo is the world’s biggest customer for jets in the A320neo family, with as many as 730 on order. The airline has yet to decide the engine type for the 300 that would be outstanding.<br/>