Monday, October 15, 2018

SpiceJet will try to cut costs, raise fares, says CMD Ajay Singh

Focus on profitability instead of market share is a reason why SpiceJet has been successful in posting positive results in the last 14 quarters. Its CMD Ajay Singh, in an interview with Swati Khandelwal of Zee Business, talked about the airline's plans in the face of the current business environment, their strategy to de-risk, among other things.

You have received the first delivery of Boeing 737 Max. What are the future plans for these planes?
It is a new technology for Boeing. We have ordered 205 planes. The aircraft is 14% more fuel efficient than the previous planes; it is the need of the hour, at least when fuel prices are high. It is a greener aircraft. Its noise footprint is 40% less than other planes and its nitrogen dioxide emissions are 35-40% lesser. It can fly 20% more than the other planes. This will help us in adding a few more international destinations; we will decide on them after a market study is completed. The new destinations will be announced soon. Besides, we have a product named Max, co-incidentally, its name is also Max. It is a premium economy product, with 36 seats with extra leg-room of 5-6 inches. It will also have a cushion and hot foods will be served during the flight. This is going to be the first plane in India that will be offering broadband internet to its consumers. It is fitted with every equipment and we are waiting for the policy, which is likely to be approved by November or December 2018.

What is the schedule of delivery for other planes? Also, how will you fund these orders?
We have ordered 205 planes and they will be delivered in the next four to five years. Ten more planes will be delivered by December. We have already funded all the planes that will be delivered to us by 2020.


You talked about expansion and entering new sectors. Is it viable given the current situation?
There is a demand in the market and Indian passengers are keen to fly. The existing conditions are not too favourable as fuel prices are too high, there is a depreciation in rupee and 70% of our cost is dollar-denominated.

The existing situations are impacting the airline companies. But the arrival of new planes will help us in reducing our costs as they are 14% more fuel efficient, engineering costs on them will help us save 25-30% expenses. In addition, we will try to reduce our costs and increase the fares in accordance with the costs. In addition, we will ask the government to go for the taxation system that is similar to the system that is practised in big countries.
15/10/18 Swati Khandelwal/DNA

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