Low-cost carriers are bullish on market growth

New Delhi: Low-fare airlines such as SpiceJet Ltd are restoring flights and even adding new routes to expand market share after having cut back their schedules and grounded aircraft in mid-summer when oil prices rose to a record and losses piled up.
SpiceJet, rival InterGlobe Aviation Pvt Ltd-run IndiGo and smaller carrier Paramount Airways Pvt. Ltd are resuming flights to destinations that had gone off their route map and flying to cities and towns that offer expansion opportunities.
The effort comes after the price of oil dropped to about a third of its July level, offering some relief to the beleaguered airline industry, which has been battling a slump in traffic amid an economic downturn.
SpiceJet, which had rolled back several domestic routes and sent planes back to lessors, is increasing flights from 94 daily in October to about 117 by this month-end.
With nearly 10% of the domestic market share, the airline has added flights to Kochi which it had withdrawn, and is offering more connections from cities such as Mumbai, Hyderabad, Ahmedabad, Jaipur and Kolkata.
SpiceJet, which has dropped a plan to return three of the 19 aircraft in its fleet, plans to use 18 at any given time keeping one as spare. The three-year-old carrier flew as many as 110 flights in March this year with 18 Boeing 737 aircraft.
IndiGo , which has 19 A320s manufactured by Airbus SAS, said earlier this month that it has increased flights to 125 a day from the 118 daily flights it was operating in March with 17 aircraft. The airline has six more aircraft on order to join its fleet over the next year.
IndiGo and SpiceJet have a combined 23% of the domestic market. SpiceJet, which has no aircraft on order for delivery until February 2010, plans to focus on passenger occupancy to increase its share.
SpiceJet and IndiGo, together with other low-fare carriers such as GoAir, Jet Airways (India) Ltd’s subsidiary JetLite and Kingfisher Airlines Ltd’s Kingfisher Red (the erstwhile Air Deccan), have around 46% of the passenger market. The rest is controlled by full-fare carriers.
Jet Airways, the country’s largest by passengers carried, may reintroduce some flights it had cut, but will proceed cautiously.
10/12/08 Tarun Shukla and P.R. Sanjai/Livemint

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Categories: Low Cost General Dec 2008