In a surprising turn of events, two Airbus A321neo aircraft previously operated by Interglobe Aviation , India's largest airline under the brand IndiGo, are being dismantled in Spain after just six years of service. This development highlights the ongoing supply chain disruptions affecting the aviation industry and raises questions about the lifecycle management of modern aircraft.

Early Retirement

The two A321neo aircraft, delivered new to IndiGo in 2019, were originally expected to have a service life of 20-25 years. However, they were returned to UK-based lessor Deucalion Aviation in February when their lease agreement expired. Subsequently, aftermarket specialist Setna iO acquired the aircraft for dismantling in Castellon, Spain.

Financial Logic Behind the Decision

The decision to dismantle these relatively young aircraft is driven by compelling financial considerations:

• Part-out Value: Each aircraft's dismantled parts are estimated to be worth between ₹373.00 crore to ₹468.00 crore ($45-56.5 million).
• Engine Value: The engines alone are valued at ₹126.00 crore to ₹177.00 crore ($15.2-21.4 million) each.
• Current Market Value: In contrast, the entire aircraft's current market value is approximately ₹356.00 crore ($43 million).

This significant disparity between the value of parts and the whole aircraft has led to the unusual decision to dismantle planes that would typically remain in service for many more years.

Industry-wide Supply Chain Challenges

The dismantling of these young aircraft occurs against the backdrop of ongoing supply chain disruptions that are impacting aircraft production and maintenance globally. These challenges are particularly acute for the A320neo family, which includes the A321neo.

Implications for Airlines

Airlines worldwide, including IndiGo, are facing difficulties in sourcing spare parts for their fleets. This situation has led to:

1. Increased demand for serviceable parts from dismantled aircraft.
2. Potential changes in fleet management strategies.
3. Possible reconsideration of aircraft leasing and ownership models.

As the aviation industry continues to navigate these challenges, the early retirement and dismantling of young aircraft may become a more common occurrence, reflecting the complex interplay between aircraft values, parts availability, and operational needs in a disrupted global supply chain environment.

While Interglobe Aviation has not commented specifically on this development, it underscores the dynamic nature of fleet management decisions in the current aviation landscape. As airlines worldwide adapt to these challenges, the industry will be watching closely to see how such strategies evolve and impact long-term fleet planning and operational efficiency.

Interglobe Aviation , which operates IndiGo, India's leading airline, has partnered with IDFC FIRST Bank to introduce a groundbreaking co-branded credit card that operates on both Mastercard and RuPay networks. This unique offering brings a host of travel benefits and rewards to customers, with flexible application options to suit different financial preferences.

Dual-Network Advantage

The IndiGo IDFC FIRST Credit Card stands out in the market as it can be used on both Mastercard and RuPay networks through a single application. This dual-network feature provides cardholders with enhanced flexibility and wider acceptance.

Application Options

Prospective cardholders have two distinct pathways to obtain the card:

1. Pay a joining fee of Rs 4,999
2. Open a Rs 1 lakh fixed deposit for guaranteed approval without any fees

The fixed deposit option is particularly innovative, as it aims to make premium travel benefits accessible to customers who may not meet traditional credit score requirements.

Rewards and Benefits

The card comes packed with attractive rewards and benefits for frequent flyers and IndiGo customers:

• Welcome vouchers worth up to 5,000 IndiGo BluChips
• Complimentary meal vouchers
• Earn up to 22 BluChips per Rs 100 spent on IndiGo bookings
• Annual milestone rewards of up to 25,000 BluChips
• High-spend customers (Rs 12 lakh annually) can potentially earn up to 60,000 BluChips plus bonus vouchers

Additional Features

Beyond the rewards program, the card offers several travel-centric features:

• Competitive 1.49% forex markup for international transactions
• Trip cancellation cover
• Travel insurance

Targeting a Wider Customer Base

By offering the fixed deposit-backed option, IndiGo and IDFC FIRST Bank are expanding their potential customer base. This approach allows individuals who might not qualify for premium cards based on traditional credit criteria to access high-end travel benefits.

The launch of this co-branded credit card represents a strategic move by IndiGo to enhance customer loyalty and provide added value to frequent flyers. For IDFC FIRST Bank, it's an opportunity to tap into the growing market of travel enthusiasts and expand its credit card portfolio with a unique offering.

As the travel industry continues to recover post-pandemic, this new credit card could be well-positioned to capitalize on the increasing demand for travel-related financial products and services.