IndiGo has been ordered to terminate its aircraft lease agreement with Turkish Airlines within three months amid rising diplomatic tensions between India and Turkiye following the latter's support of Pakistan during Operation Sindoor.
The budget airline, which operates direct flights from Delhi and Mumbai to Istanbul using two leased Boeing 777 aircraft from Turkish Airlines, had permission to do so until May. It had approached the Directorate General of Civil Aviation to renew the pact for another six months, but it was denied.
However, to prevent disruption to passengers, the aviation watchdog has granted IndiGo "a last and final" extension until Aug. 31 for these damp-leased aircraft. This interim arrangement was agreed to "based on the undertaking from the airline that, they will terminate the damp lease with Turkish Airline within this extension period and shall not seek any further extension for these operations", DGCA said.
The leased Boeing 777 aircraft is capable of seating over 500 passengers. As per the deal, Turkish Airlines — the supplier of the plane — operates the plane with its crew and is responsible for its maintenance. IndiGo, on the other hand, manages ground operations in India and sells tickets.
It also offers seats to more than 40 points in Europe and the US through the codeshare partnership with the Turkish carrier. This codeshare comes under the framework of India-Turkey air services agreement, which allows carriers from both countries to operate up to 56 weekly flights.
Under the current rules, an airline can wet lease an aircraft for six months, extendable by another six months. IndiGo, however, has been successful in securing multiple extensions, citing supply chain chaos and subsequent delays in deliveries. This arrangement helped IndiGo to expand in the long-haul markets in Europe and the US and compete with Air India, without having its own planes. It has placed orders for 40 Airbus A321XLR and 30 Airbus A350 aircraft to boost its international expansion.
NDTV Profit was the first to report on May 19 that the government was not in favour of renewing the IndiGo-Turkish Airlines agreement and that it may allow a grace period to end the pact to avoid passenger disruptions.
IndiGo was not immediately available for a comment on Friday. It has previously defended the Turkish partnership, saying it offers multiple benefits to Indian travelers and boosts aviation growth and jobs.
IndiGo CEO Pieter Elbers has also said on multiple occasions that the airline will comply with government regulations in case of any changes in the lease agreement with Turkish Airlines. He also indicated that the airline has made a contingent plan to reduce the potential impact on operations.
The plan, sources say, involves replacing the leased Boeing 777 aircraft with either Airbus A321neo or 787-9 Dreamliners in its India-Turkey routes.
Prior to the pact with Turkish Airlines, IndiGo was using shorter Airbus A320 neo aircraft on Istanbul routes, which cost them extra flying time as it was required to make a technical halt. Also, they could fly 186 passengers, which is just a third of the passenger capacity they could fly on a 777.
The latest action comes just weeks after the government revoked the security clearance for Turkish-based firm Celebi Aviation at nine key airports in India, including Delhi in the "interest of national security".
Celebi was replaced overnight by its Indian counterparts — IndoThai, AISATS and the Bird Group — at Mumbai and Delhi airports.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
