UTX United Technologies Corporation

   By Santanu Choudhury 
 

NEW DELHI--Shares in InterGlobe Aviation Ltd.--which runs India's largest airline IndiGo--plunged more than 18% Friday due to investor concerns over a prolonged delay in the delivery of A320neo planes by Airbus Group SE.

The sharp fall in the Indian company's stock price came despite it posting a 24% rise in quarterly net profit on the back of lower fuel prices and higher passenger traffic.

IndiGo's President Aditya Ghosh said the carrier has decided to take 22 used aircraft on lease to make up for the capacity shortage caused by the delay in delivery of the A320neo aircraft.

IndiGo was informed by Airbus in mid-December that it wouldn't be able to deliver the first A320eo as promised by the end of December due to "industrial reasons."

Airbus said it delayed the first delivery of its new plane after it and engine maker Pratt & Whitney, a unit of United Technologies Corp., failed to get all required documentation ready in time. Pratt & Whitney--which has faced obstacles in developing the A320neo's engine--has acknowledged that some issues related to the documentation of the engine still need to be resolved.

"We continue to monitor the situation and are engaged in extensive discussions with Airbus as well as Pratt & Whitney," said Mr. Ghosh in a conference call with analysts late Thursday. IndiGo currently has a fleet of 101 Airbus planes.

He said the airline doesn't have any clarity as to when it would receive the first A320neo plane from Airbus.

The delay in the delivery of the planes means IndiGo won't be able to meet its aim of having a fleet of 111 planes by the end of March, Mr. Ghosh said.

IndiGo is by far the largest customer for the A320neo, with 430 planes on order with Airbus. Deutsche Lufthansa AG is set to become the launch operator of the A320neo after it received the first aircraft on Wednesday.

The A320neo is an upgraded model of Airbus's popular single-aisle plane. Airbus said the new model will be 15% more fuel efficient than its existing narrowbody planes.

Mr. Ghosh said the carrier has already taken delivery of 17 used planes and two more would be added to its fleet in the current quarter, and the remaining three in the quarter ending September.

InterGlobe's profit in the three months ended Dec. 31 increased to 6.57 billion rupees ($97 million), from 5.31 billion rupees a year earlier. Revenue grew 12% to 44.07 billion rupees.

The company's fuel expenses fell 20% in the last quarter. That was offset partly by higher rental fees for aircraft and their engines. IndiGo carried 28% more passengers during the quarter to 8.33 million passengers.

Shares of InterGlobe fell more than 18% to 980 rupees in intraday trading on the Bombay Stock Exchange. It was the biggest fall since the company got listed in November last year.

Write to Santanu Choudhury at santanu.choudhury@wsj.com

(END) Dow Jones Newswires

January 22, 2016 02:30 ET (07:30 GMT)

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