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Spicejet to go on expansion spree in non-metros with Bombardier Q-400s

Zoom  Zoom Issue Date:2011-09-18   Source: the economic times   Browse:717

HYDERABAD: Aiming at taking on "fierce competition", no-frills carrier Spicejet today said it would go on an expeditious route network expansion spree covering non-metro airports with the induction of its new Bombardier Q-400 aircraft.

 

Meanwhile, maintaining that the pricing pressure would continue as long as its competitors resort to "irrational pricing", airline CEO Neil Mills said such pricing and high fuel prices would continue to put pressure on the bottomline of the airline.

 

"The turnaround factor for Spicejet is nothing to do with Spicejet. Once our competitors stop reducing prices then our turnaround will happen next week," Mills said.

 

He said the listed low-cost carrier was expecting its newly acquired Q-400 aircraft to contribute to the bottom line in 12 to 18 months.

 

The airliner was "all set to expand its network to connect more Tier II and Tier III cities from Hyderabad starting September 21," Mills said.

 

"The revenue will certainly increase and bottom line will also increase in 12 to 18 months. We believe this is a good product for our financial success. This is a high volume product for us," Mills told a press conference here.

 

Terming the introduction of the Q-400s as "a game changer" for the industry, the SpiceJet CEO said it would also ease the risks involved in metro to metro connectivity where competition was fierce.

 

The airline recently received four of the 30 aircraft order it placed with Bombardier earlier. Another eight aircraft are expected to join the Spicejet fleet by July next year, Mills said, hoping that the load factor on the Tier-II and III cities would hover around 75 per cent.

 

"We will be doing around 100 flights a day from March next year on this product (Q-400) alone. This will give us daily volume and it is significant in terms of passenger number," he explained.

 

SpiceJet will also be flying on three new routes - Hyderabad-Mangalore, Hyderabad-Aurangabad and Vizag-Tirupati.

 

About the company's performance, Mills said the company suffered a net loss of Rs 71.9 crore in the June quarter, although its total income increased to Rs 945.6 crore.

 

Shares of Spicejet closed at Rs 24.50 on BSE, down 2.78 per cent over its previous close.

 
 
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