IndiGo Airlines (6E, Delhi International) has announced in a stock market filing that the Board of Directors of parent holding InterGlobe Aviation approved the plan to raise up to INR40 billion rupees (USD535 million) through an issue of equity shares by way of a qualified institutions placement.

The details of the issue will be announced once the plan is approved by the shareholders.

The planned share issuance would come on top of other measures recently undertaken by the low-cost carrier to strengthen its liquidity. Chief Financial Officer Aditya Pande said during the quarterly earnings call that IndiGo Airlines was seeking to raise INR20 billion (USD267 million) through aircraft sale-and-leaseback and on financial markets.

"We are working on sale and lease back of our unencumbered assets which are in advanced stages of discussion. We are also in discussions with export credit agencies for obtaining moratorium towards principal repayment for aircraft on finance leases," Pande said.

While Pande did not disclose further details, The Hindu BusinessLine has reported that the airline was in advanced talks about a sale-and-leaseback of its twelve owned ATR72-600s. IndiGo Airlines is reportedly in talks with Aergo Capital and DAE Capital, although it would prefer to sell the whole dozen turboprops to a single lessor.

The ch-aviation Commercial Aviation Aircraft Ownership Data module shows that the twelve ATR - Avions de Transport Régional aircraft are the only units owned by IndiGo Airlines. The carrier dry-leases a further thirteen ATR72-600s, as well as all of its Airbus narrowbodies (eighty-three A320-200s, 103 A320-200Ns, and eighteen A321-200Ns). It does not lease any aircraft from Aergo Capital, while DAE Capital owns six A320-200s operated by IndiGo.

According to sources, the airline hopes to raise between USD216-240 million through the sale-and-leaseback of the ATRs.

"We view our relationships with our lessors as one of our key success factors. We are therefore managing our leasing costs from a long term perspective and honouring all our commitments," Chief Executive Ronojoy Dutta said.

In another fleet development, the carrier is planning to start taking deliveries of A320neo aircraft powered by CFM International LEAP-1A engines shortly. LiveMint has reported, quoting two sources, that the carrier hopes to receive the first aircraft with the new engine type by the end of August 2020.

IndiGo Airlines has long struggled with low reliability of its A320neo aircraft powered by Pratt & Whitney PW1127G-JM powerplants. After numerous extensions of the deadline given by the Indian Directorate General of Civil Aviation (DGCA), the carrier plans to complete the replacement of all defective PW1127G-JM engines by the end of August as well.

"We are coming to finish this whole exercise. Right now we still have 14 aircraft left which need to be refurbished and we can see from the pipeline of the incoming engines, the whole exercise will be finished by the end of August," Chief Operating Officer Wolfgang Prock-Schauer said during the quarterly earnings call.

According to the ch-aviation Commercial Aviation Aircraft Data module, all of the carrier's A320neo and A321neo aircraft are currently powered by Pratt & Whitney engines. The bulk of its A320-200s are powered by International Aero Engines IAE V2527-A5 powerplants, except for eight units powered by CFM International CFM56s.

IndiGo Airlines had 224 A320neo and 380 A321neo on firm order from Airbus at the end of June 2020.