Budget carrier SpiceJet, which reported a 22 per cent increase in net profit to Rs 56.3 crore in the quarter ended March, is in the midst of aggressive capacity expansion. On Sunday, the airline, currently the third largest in the country, announced the induction of a Boeing 737, taking its fleet size to 100. The buzz is that SpiceJet hopes to increase capacity by a whopping 80 per cent in the current fiscal, an impressive turnaround for an airline that was on the brink of closure in 2014.
Having already inducted 22 Boeing 737 NG (Next Generation) planes from the now- wingless Jet Airways, the carrier now plans to add eight more such planes in the next two weeks, Kiran Koteshwar, chief financial officer (CFO) of SpiceJet told Mint, adding that "we didn't incur any additional capex on these aircraft". Over 80 planes of Jet Airways have been deregistered since its cash-crunch began and the airline was forced to cease operations last month. The 30 Boeing planes bagged by SpiceJet are all on short-term leases, with a maximum lease tenure of 24 months.
SpiceJet currently has 68 Boeing 737s, 30 Bombardier Q-400s and two B737 freighters. On an average it operates 575 daily flights to 62 destinations, 53 of which are domestic. It expects the additional capacity to cater to higher demand during the peak summer travel season of April-June, thanks to school holidays. "The capacity vacated by Jet Airways had to be filled by someone else. Mathematically, we have advanced our expansion programme, which was supposed to happen in 2021 to 2019, by inducting the new capacity," Koteshwar added.
SpiceJet is also hopeful that it will get all its grounded 737 Max planes back in operation by July end. According to the CFO, the guidance given by Boeing indicates that all the necessary work has been done in this regard and regulatory permissions are now awaited.
In March, India had joined the growing number of countries grounding Boeing 737 MAX 8 planes following two deadly plane crashes killing 346 people in the space of five months, both involving this aircraft model. First came the Indonesian carrier Lion Air's plane crash last October followed by the Ethiopian Airlines' crash on March 10. India's aviation watchdog Directorate General of Civil Aviation had said at the time that these planes would be "grounded till appropriate modifications and safety measures are undertaken to ensure their safe operations".
The ban had hit SpiceJet the hardest. It owned 13 Boeing 737 Max 8s while all five belonging to Jet Airways - the only other domestic airlines that had inducted this model - had already been grounded when the DGCA order came it.
Koteshwar claimed that SpiceJet intends to replace all Boeing 737 planes with the more fuel efficient Boeing 737 Max planes in the next 18-24 months, assuming they get the regulator's nod to fly. The airline is reportedly also evaluating the low-cost model to fly to long-haul international destinations.
"SpiceJet passengers will soon be able to travel to popular destinations across America, Europe, Africa and Middle East, seamlessly on a single ticket," the carrier's chairman and managing director Ajay Singh had reportedly said in a letter to employees last week. He further claimed that SpiceJet will add more than 50 to its fleet during the current calendar year.
With PTI inputs