India's IndiGo assessing Pratt & Whitney engine trouble; sees drop in second-quarter yield

BENGALURU, Aug 2 (Reuters) - IndiGo operator Interglobe Aviation (INGL.NS) on Wednesday said it was assessing the impact on its fleet due to troubled Pratt & Whitney engines, and that it expects a fall in yield due to seasonal weakness in the second quarter.

Pratts owner RTX (RTX.N) said last week that some engines have to be removed from planes and inspected for micro cracks.

The impact for IndiGo in the initial phase will be a \“net single digit number of engines,\” IndiGo CEO Pieter Elbers said in an analyst call.

\“We dont know yet what this is going to be the precise impact in the phase thereafter. We are in clear contact with Pratt ... We are also working on possible mitigating measures.\”

Indias biggest airline by market share posted a profit of 30.87 billion rupees ($373.9 million) for the quarter ended June 30 on strong demand for air travel and a fall in jet fuel prices, compared with a loss of 10.65 billion rupees a year ago.

IndiGos yields, a metric for profitability, fell 1.2% year-over-year to 5.18 rupees per kilometre, but was more than offset by a 12.7% drop in fuel costs.

However, during the second quarter, there will likely be a larger dip in yield due to the absence of major festivals, Chief Financial Officer Gaurav Negi said.

The airline benefited from troubles at smaller rivals Go First and Spicejet , as well as a strong recovery in air travel demand in the worlds third-largest aviation market.

The carriers market share rose to 60.7% at the end of the June quarter from 55.7% at end-March.

IndiGos load factor, or the passenger carrying capacity being utilised, improved by nine percentage points to 88.6%.

The company also expects capacity to rise by about 25% from a year earlier in the quarter.

($1 = 82.5680 Indian rupees)