Airbus Delays A320neo Deliveries To India’s IndiGo Citing 'Industrial Reasons'

In the latest setback to Airbus' new A320neo aircraft, the European plane maker informed low-budget Indian airline IndiGo that the delivery of the jets had been delayed due to "industrial reasons." Following the news, shares of InterGlobe Aviation, IndiGo’s holding company, fell more than 5 percent on Monday.

IndiGo said, in a statement filed with the Bombay Stock Exchange on Saturday, that it does not have a "clear visibility of its future A320 neo delivery schedule" and that there was a possibility of further delays.

"On December 17, 2015 after close of business hours, we have received an official notification from Airbus that the A320 neo aircraft, the first of which was to be delivered on December 30, 2015 has been delayed due to 'industrial reasons,'" IndiGo said.

The company added that it is looking at mitigating the potential shortfall in capacity through other options, without elaborating. However, IndiGo did not reveal if it would seek compensation from Airbus for the delay.

The announcement comes soon after the rollout of the Airbus A320neo faced technical troubles as Qatar Airways — due to be the first user of the A320neo — reportedly drew back from the deal last month as the slower cooling rate of the revamped jet’s Pratt & Whitney engines meant that the plane had to be grounded for longer. Deutsche Lufthansa AG and IndiGo were next in line for the A320neo.

IndiGo said in August it would buy as many as 250 A320neos from Airbus -- the European company’s biggest order by number of planes, with a list value of $26.6 billion, surpassing its previous record when IndiGo agreed to take 180 neos valued at $15 billion in January 2011.

IndiGo, which uses only A320 aircraft right now, had bet big on the fuel-efficient neo versions of the planes that will help the airline cut fuel costs by 10 to 15 percent, according to a report by Livemint.

“Induction of A320neos will be a springboard for Indigo to [reach] the next level of revolutionary growth,” IndiGo CEO Aditya Ghosh said in a Livemint interview in September.

Airbus had also run into trouble over deliveries in November after a French company that supplies seats for its planes, Zodiac Aerospace, suffered a series of high-profile delays and profit warnings. Airbus CEO Fabrice Brégier at that time criticized suppliers as the delay had disrupted the plane maker’s delivery schedule.

"The majority of them are very good at marketing and selling and less good at certifying and crap at producing," Brégier told a group of journalists in November, according to Reuters.