26 November 2019 INDIGO has guided to bring down its high maintenance cost significantly from FY22 as deliveries for A321neos replace the older aircraft and the share of A321neos increases in the total fleet. However, the directive from the DGCA can delay this guidance due to replacement of older aircraft, which in turn might require extension of current leases and result in continued high maintenance cost. It may take 5-6 months to catch up the lagged supply, creating difficulties for replacement of engines according to the DGCAs directive. Considering the sizeable amount of modification (110 engines) and the supply lag from the aircraft manufacturer, the company may not be able to replace all of the required 110 engines in FY20, in our view. As a result, there is no change in our EPS estimate for FY20/21. Our estimates are highly sensitive to (a) ticket yield, (b) PLF and (c) crude price assumption.