DGCA has extended the deadline for INDIGO to replace its A320neo aircraft fitted with unmodified Pratt and Whitney (PW) engines to31st May’20 from 31st Jan’20 earlier. The extended deadline would allow INDIGO to achieve its revised Available Seat Kilometer (ASK) growth targetof 22-23% for FY20. Extension will also allow INDIGO to add new aircraft on new/fresh schedules. This will allow the company to make net additionsin ASK growth.

INDIGO is expecting lag in deliveries of new aircraft due to various issues faced by Airbus. INDIGO targets to replace most of the older aircraft by end-FY22 with new deliveries.

INDIGO continues to enjoy the streak of highest domestic market share (~48% for 8MFY20). But profits are vulnerable to 1. Ticket Yield 2. Crude Price 3. PLF. Also, conflict between the promoters could continue causing corporate governance challenges.

Disclaimer: The above report is compiled from information available on public platforms. inChat team advises users to check with certified experts before taking any investment decisions.

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