25 October 2015
ndiGo developed its own boarding stairs for passengers with limited mobility, but it also plans to procure a range of new GSE as it expands its fleet. Source: Neelam Mathews
Encouraged by low aviation fuel prices and a growing economy, Interglobe Aviation, promoter of India's largest budget airline, IndiGo, is looking to raise around USD465 million in an initial public offering.
About USD5.3 million of the funds raised will be used up to March 2018 for the procurement of ground support equipment (GSE), IndiGo confirmed in a document filed with the Registrar of Companies and Stock Exchanges.
GSE to be purchased includes 26 apron buses, 13 tow tractors, 47 ground power units, and nine pushback vehicles. IndiGo will replace GSE nearing the end of its service life, while also procuring equipment to match its fleet expansion plans.
The airline does not intend to buy any second-hand equipment. "The prices for the equipment proposed are as per the quotations received from the respective suppliers, which are valid until a certain period of time," the document said.
According to the latest outlook from the International Monetary Fund, India will be the fastest-growing large economy in 2015-16, with predicted GDP growth of 7.3% for the year ending 31 March 2016. A new aviation policy being finalised by the Indian government is likely to mandate environment-friendly airport GSE, but domestic airlines are engaged in a legal dispute with the government over a directive ordering them to use approved ground-handling companies.
"Quality of equipment has been a long-standing issue with ground-handlers, [which mostly] operate with no inherent standards," Vishok Mansingh, CEO of CAV Aero, toldIHS Jane's . He added that the IndiGo procurement strategy would help the airline adhere to service quality standards, "no matter who wins the case".
Mansingh argued that ground-handling "is underestimated by many but is a big differentiator between good and bad service as far as passenger experience goes. It is the first and last thing experienced by the customer". IndiGo in 2014 launched its own patented boarding stairs for passengers with reduced mobility, described by Mansingh as "a good concept that speeds boarding and reduces turnaround time".
Want to read more? For analysis on this article and access to all our insight content, please enquire about our subscription options ihs.com/contact