Spicejet to expand fleet before launching international operations

Tuesday, July 7, 2009, 15:13 by Aviation Correspondent

Indian carrier, SpiceJet Ltd. is all set to purchase new passenger aircrafts from Boeing as a part of its capacity-expansion plans for the fiscal year 2010.Spice jet had earlier ordered 30 aircrafts in May 2005. Currently, the carrier operates uses Boeing 737 planes to operate 125 daily flights to 18 cities in the country.

The airline plans to expand its aircraft count by adding another eight planes by March 2012. SpiceJet is all set to begin its international operations in 2010.

“We are analysing all aspects of it. We are studying in which markets bilateral rights are available, what are the routes,” SpiceJet CEO Sanjay Aggarwal said.

“We are evaluating international operations as also regional connectivity, coupled with our fleet order. These are expensive decisions. Therefore we have to take smart decisions,” he further added.

The airline has said that apart from Airbus and Boeing planes, it is also looking at smaller aircraft like ATRs and Bombardiers.

Reports say that SpiceJet will first add Airbus planes and small regional jets of Bombardier Inc. or turboprop aircraft of Avions de Transport Regional to its existing fleet of 19 Boeing 737 planes.

The aircraft generated good revenues in May 2009, as a result of hedging on the price of aviation turbine fuel.

SpiceJet has been doing its best to cope with the rising fuel prices. The airline started hedging for their fuel requirements, earlier in 2009, and since then has been riding high on revenues.

SpiceJet has managed to restrict losses in the first quarter of 2009, posting a net loss of Rs 78.2 million compared to a net loss of Rs 1.2 billion in 2008.

Sanjay Aggarwal seemed optimistic about the future. “Our revenues continue to look up. Our bottomline is also good with major cost control measures and improvement in product quality,” he said.

Meanwhile, a report in The Economic Times said that SpiceJet has been asked by its investors to scout for acquisitions in the Indian market.

There have been rumors that SpiceJet may take over JetLite or enter an operational tie-up with the budget carrier.

Mr Aggarwal believes that the future of Indian aviation is bright. “The pie is going to grow much bigger than can be imagined. Conservative estimates are that air traffic demand will grow by 73% by 2014, while the growth in capacity will be 41%,” he remarked.

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