SpiceJet to focus on profitability, not market share

Airlines 25% capacity is international

SpiceJet to focus on profitability, not market share

 SpiceJet has seen eight profitable quarters since its most turbulent phase in 2014, when Ajay Singh retook its controls.

As the low-cost airline looks at the future, it has laid focus on profitability, rather than market share.

In a discussion with DH, Singh affirmed, “We are not so focused on market share, which is about 13%. We want to fly well and profitably.”

The airline had nearly run aground in December 2014, when people were not willing to fly on it, flights were being cancelled, lessors were trying to seize planes, and creditors were asking for their money.

“And, from there we made progress. In the last 22 months, we have achieved a load-factor over 92%, and have garnered the best OTP (on-time performance) compared with any other airline in the country,” he said.

Even as a no-frills product, as part of its differentiation strategy, SpiceJet has continued to offer disruptive service innovations to passengers on the ground, and in the air.

“We have the Spice Max product — with wider seats, much like a premium economy proposition. We also have hot meals on board, and fly more international routes. We are testing a loyalty programme at this time, which would also act as a differentiator,” Singh said.

Currently, SpiceJet serves 48 destinations, through a fleet of around 50 aircraft, including Boeing 737s and Bombardier Q400s. Being India’s largest regional player, all eyes are now on the government’s ambitious UDAN scheme.

“The UDAN scheme is a welcome move by the government. In our country, we have over 400 airports, 75 of which are actually functional right now. It is critical for India to get small towns and small airports viable, and getting people there to fly. That’ll get the next wave of growth,” he said, adding that SpiceJet would participate in the scheme.

Six routes

Around 25% of its capacity is international, on which, it flies six routes. In order to increase its destination spread, both domestically and internationally, SpiceJet has placed an order with Boeing for 200 aircraft, at a list value of $22 billion.

“Our order is for the Boeing 737 MAX, which is about 20% more fuel-efficient than current planes. While 155 are firm orders, we have purchase rights for 50 other planes. We are studying wide-body aircraft (Boeing 787 Dreamliner) options as well,” Singh said, hinting at procurement of large planes in the future, for long-haul markets.

The said planes will see delivery from mid-2018 all the way till 2024, and the airline already has Boeing infrastructure.

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