SpiceJet on buying spree, eyes 20% addition in global capacity

The Chennai-based no-frills carrier SpiceJet on Tuesday said it is planning to acquire more aircraft as it expands its domestic and international footprint . The airline will finalise its fleet expansion order in the next three months, said Neil Mills, the the airline’s chief executive officer.

The second-largest budget carrier is eyeing a 15-20 percent capacity addition on the international network in the next two-three years, Mills said on the sidelines of CAPA-India aviation summit.

[caption id=“attachment_508926” align=“alignleft” width=“380”] The second-largest budget carrier is eyeing a 15-20 percent capacity addition on the international network in the next two-three years. AFP[/caption]

“We will continue to add more international routes. We are looking at 15-20 percent capacity addition on global network over the next two-three years from the current 6 percent of the total capacity. Domestic routes will also continue to grow mainly on the regional market,” Mills said.

Mills said the carrier had not decided about the type of aircraft–Boeing or Airbus or both– it plans to acquire.

Recently aviation think-tank Centre for Asia Pacific Aviation (CAPA) had said in a report that SpiceJet was evaluating the purchase of 30-40 Boeing MAX planes.

SpiceJet currently has a mix of Boeing 737s (36) and Bombardier Q400s (12) in its fleet of 48 planes. It would add three more Bombardiers by December, one of which will be deployed on the proposed Thiruanathapuram-Male route.

Besides it will launch services to the Chinese city of Guangzhou and Riyadh in December with a Boeing 737. In addition, the carrier will also take delivery of six brand new leased aircraft next year, Mills said, adding “we will also use the leasing options to expand”. The airline, which currently is the number four aviation firm in India in terms of market share, flies to four international destinations of Kathmandu, Colombo, Kabul and Dubai.

Discounting the reports suggesting that funding of the aircraft acquisition was a challenge, Mills said it is not an issue as, “the three Bombardier Q400s are to be funded through the EDC (Export Development Canada) facility.”

On the fund raising prospects Mills said the airline is not in a hurry to mop up funds as it is paying all bills and salaries to its employee on time. “We have been looking at opportunities (funding) but we don’t need it tomorrow. We are not desperate too much.”

Stating that the carrier is open to investment from any quarters, Mills said, “It could be with anybody. But it should make sense for us and our shareholders.”

High jet fuel cost and airport charges are eating into industry’s revenue, he said, but expressed hope the festival season may lead to higher load factor.

On SpiceJet’s plan to directly import jet fuel (which currently accounts for nearly 50 per cent of operational cost) Mills said the shipments would start as soon as the last `bureaucratic hurdle’ is cleared.

Agencies