Government Reviews IndiGo–Turkish Lease Pact Ahead Of May 31 Deadline; Renewal Unlikely — Profit Exclusive

The government is unlikely to renew InterGlobe Aviation Ltd.'s leasing agreement with Turkish Airlines, in a move that signals further strain in bilateral ties, according to people familiar with the matter. The current pact, which enables IndiGo to operate aircraft on the Mumbai-Delhi-Istanbul route, expires on May 31.

While the review exercise is currently underway, the IndiGo-Turkish Airlines agreement is "unlikely to be renewed", given the broader diplomatic context, the people said. The government, however, is expected to hold dialogues with IndiGo management before taking any definite action with various stakeholders involved, and competing interests at play.

Sources also indicate the airline may be granted a grace period to terminate the pact, in order to avoid passenger disruptions.

The development comes as India has been cutting commercial ties with Turkey following Ankara's support of Pakistan during Operation Sindoor.

Last week, the Ministry of Civil Aviation revoked the security clearance of Turkish firm Celebi, which handled ground operations across nine airports in India. Celebi was replaced overnight by its Indian counterparts — IndoThai, AISATS and the Bird Group — at Mumbai and Delhi airports.

There are also growing calls to boycott Turkish Airlines, which has big business in India. Peer Air India, in fact, has written to the government to halt IndiGo's lease with the Turkish carrier citing security risks. It argues that the partnership is benefiting Turkey and hurting India's aviation sector, Reuters reported. The airline, however, has refused to have engaged in any talks that involve "competitor’s business", according to a statement.

BJP MP Praveen Khandelwal has also urged the government to review aviation ties, particularly the IndiGo-Turkish Airlines agreement. In a letter to Civil Aviation Minister Kinjarapu Ram Mohan Naidu on May 14, he requested the government to direct carriers like IndiGo to "reassess and where necessary, suspend such collaborations".

"Continuing these ties may be perceived as implicit endorsement of a regime that undermines India's interest," he stated in the letter.

Currently, IndiGo operates direct flights from Delhi and Mumbai to Istanbul using two leased aircraft from Turkish Airlines. These are Boeing 777 aircraft, each capable of seating over 500 passengers.

As per the deal, Turkish Airlines — the supplier of the plane — would operate the plane with its crew and be responsible for its maintenance. IndiGo, on the other hand, manages ground operations in India, sold tickets, and marked flights with its code.

Such leasing deals are approved by the aviation regulator for six months in case of "unforeseen" circumstances and can be extended by another six months. IndiGo, however, has been successful in securing multiple extensions, citing supply-chain disruptions 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. The airline has placed orders for 40 Airbus A321XLR and 30 Airbus A350 aircraft to boost its international expansion.

Prior to the latest extension, the airline 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. Moreover, they could fly 186 passengers, which is just a third of the passenger capacity they could fly on a 777.

A codeshare agreement with the Turkish Airlines also allows IndiGo to offer seats beyond Istanbul to over 40 destinations in Europe and the US.

IndiGo on Thursday defended its collaboration, calling it a "win-win" for customers, the airlines as well as the broader Indian economy.

"The additional revenue [generated from this arrangement] has led to increased tax contributions to the Indian exchequer, supporting economic growth," the airline had said in a statement to NDTV Profit. This partnership also provides "more accessible and affordable" travel, especially for long-haul routes, and creates job opportunities in India.

The India–Turkey air services agreement permits carriers from both countries to operate up to 56 weekly flights—14 each way by Indian and Turkish airlines.

IndiGo did not respond to NDTV Profit’s specific requests for comment on the government’s latest review. However, the company is expected to address these issues when speaking to media post-results on May 21.