Says international foray’s contribution will increase top line 12%

Gurgaon-based low-cost carrier SpiceJet said today it would double its current 22-plane fleet by the end of 2013. It also said the projected contribution from its international operations, which the airline would commence next month, was likely to increase its top line by 10-12 per cent.

After flagging off a direct flight from Chennai to Madurai today, SpiceJet Director and CEO Kishore Gupta said the fleet expansion — as well as additional routes — would not involve any major investment from the company. According to the airline’s Chief Commercial Officer Samyukth Sridharan, the fleet would be expanded by way of purchase, as well as both lease back and pure lease.

“We will be getting six more Boeing planes by January 2012. In addition, we plan to lease another six planes. Apart from these, the company has placed an order for 30 aircraft with Boeing,” Sridharan said. The value of the order is around $2.7 billion. He added the company may take two aircraft on its books at a later stage, but most of the fleet expansion will be by lease of aircraft.

Even after doubling in number by 2013, SpiceJet’s fleet may still be behind India’s largest low-cost carrier, IndiGo, which operates a fleet of 28 Airbus aircraft, with 72 more aircraft on order. These will come by 2015. IndiGo also has an in-principle approval from the government for 150 more aircraft.

New routes planned, too
With the proposed new fleet, SpiceJet plans to expand its services by adding 12 more routes. These will cover Thiruvananthapuram, Nagpur, Indore, Bhubaneswar and Lucknow, among others. The company is also starting an international service from October 7. The first flight will take off from Delhi for Kathmandu, followed by a Chennai-Colombo flight from October 9.

“We also have rights to fly to Dhaka and Male. That will happen over a period of time. The international operations would increase our top line by 10-12 per cent,” Sridharan said. “The demographic profile in these destinations are similar to ours. As such, there will be no additional costs involved. The operations will be on a hub-and-spoke model. Our Colombo flight will leave after our other flights to Chennai land.”

source: Business Standard

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