SPICEJET: Stellar performance
U.S. Vice President Mike Pence with SpiceJet CMD Ajay Singh
During FY17, SpiceJet excelled on all operational parameters and emerged as the country's most punctual airline with the best on-time performanceOur Correspondent
Published: Mon 14 Aug 2017, 6:00 PM
Last updated: Mon 14 Aug 2017, 8:00 PM
From being on the brink of near closure in December 2014, to scripting one of the biggest global aviation turnarounds, SpiceJet has come a long way. In June, according to a report, SpiceJet emerged as the world's best performing aviation stock with a 124 per cent gain.
"It was beyond anybody's imagination, that SpiceJet, which many predicted will go the Kingfisher way in 2014, would be back and how," says a spokesperson. "In December 2014, during the crisis, SpiceJet had cancelled a large number of flights. Passengers had lost confidence. Vendors hadn't been paid for months and lessors had repossessed a large number of planes. There was a perception that SpiceJet was dead and gone."
With Ajay Singh coming back as the Chairman and Managing Director, the first thing that was needed to do was to reverse the set perception. According to the spokesperson, the airline's co-founder and Chairman Singh played the white knight, cutting loss-making routes and aggressively adding capacity in one of the world's fastest growing markets. Over the course of the year, the airline dramatically improved the revenues and reduced costs. The results were there for the world to see.
During FY17, SpiceJet excelled on all operational parameters and emerged as the country's most punctual airline with the best on-time performance. "SpiceJet's rate of cancellation of flights was one of the lowest and it recorded over 90 per cent Passenger Load Factor for 27 successive months - a feat unequalled in global aviation history," adds the spokesperson. "The airline also reported a stellar financial performance clocking its second successive profitable year and ninth consecutive profitable quarter ended March 31, 2017."
The year 2017 continues to stand out for many more reasons. On January 13, SpiceJet announced an order for 205 next-generation Boeing airplanes valued at $22 billion, making it the biggest order placed by any Indian airline with Boeing in its history. To add to this massive aircraft order, SpiceJet has also signed an MoU with Boeing for 40 737 MAX planes, at the Paris Air Show this year.
The SpiceJet-Boeing deal received great accolades during a recent meeting between Indian Prime Minister Narendra Modi and U.S. President Donald Trump at the White House. Trump lauded SpiceJet for creating jobs in the U.S. with its $22 billion order for Boeing planes.
"President Trump's compliment was followed by Vice President Mike Pence's praise for SpiceJet during the U.S.-India Business Council meeting that was attended by the airline's CMD Ajay Singh," says the spokesperson. "While addressing the 42nd annual gala of the U.S.-India Business Council (USIBC), Pence praised Indian companies including SpiceJet for creating tens and thousands of jobs in America."
The historic and much appreciated order with Boeing, which ended the turnaround phase for SpiceJet and marked the beginning of a new growth story, will let the airline expand its wings - both within and outside the country, adds the spokesperson.
The airline at present operates 380 daily flights to 49 destinations, of which seven are international.
About 11 per cent of SpiceJet's operational capacity is international, which the airline is looking to increase eventually. Dubai is one among the seven international destinations that the airline operates to.
"Dubai is an incredibly important destination for SpiceJet and is the airline's number one international market today flying more than 100,000 passengers a month to and from Dubai," says the spokesperson.
The airline serves Dubai with direct flights from 10 Indian cities: Delhi, Mumbai, Ahmedabad, Pune, Kochi, Madurai, Amritsar, Kozhikode, Jaipur and Mangalore, with connections from dozens of more cities including the metros Kolkata, Chennai and Bengaluru. The airline plans to increase its footprint across the Middle East markets with additional flights.
From a regional network perspective, SpiceJet has signed a letter of intent (LoI) with Bombardier at the recently held Paris Air Show to buy as many as 50 Q400 turboprop planes.
SpiceJet is the largest and most organised airline operating under the regional connectivity scheme with a fleet of 20 Bombardier Q400 aircraft with a seating capacity of 78 each. The airline was awarded six proposals and 11 routes under the first phase of the Government of India's UDAN RCS (Regional Connectivity Scheme), in March.
While SpiceJet is focusing on its network expansion by acquiring more aircraft, it has been simultaneously trying to differentiate its product.
The airline has tied up with Lufthansa Systems to provide inflight entertainment to passengers on their mobiles and laptops in new planes. SpiceJet has also tied up with LIFT for Tourist Class Seating in 737 MAX and 737 Next Gen Aircraft.
These are lightweight seats to provide more legroom to customers and wider in length to make travel even more comfortable.
The airline has also opened SpiceJet retail stores (online and offline) to further boost its ancillary revenue income which has witnessed a phenomenal growth from six per cent to around 17 per cent in the last two years.