SpiceJet, India’s second-largest carrier by domestic market share, said it is expanding again. The airline announced the launch of 42 new flights in a phased manner on July 8.
Most of the routes announced on Thursday have been operational or were announced before the second wave of COVID-19. The airline shrunk its schedule rapidly in the month of May as the country battled a deadly second wave of COVID-19 infections.
The sharp decrease meant that the airline was operating much fewer flights than the 50% quota which was allowed and ceded its number two spot in market share to Air India. However, at a cumulative level in 2021, SpiceJet continues to hold the second spot by passengers flown, though with a margin of just a lakh over Air India.
In its current expansion, it looks like the airline has decided to pick and choose its battles - starting a mix of monopoly routes, reinstating flights on sectors where there is demand for leisure travel and getting all flights back at Gwalior - the constituency represented by Jyotiraditya Scindia until 2019. Scindia was appointed the Minister of Civil Aviation on July 7.
It has always been difficult to compete with IndiGo. In a market where capacity and market share follow each other, most routes have seen IndiGo be the capacity leader! There have been instances when Spicejet was forced to withdraw from sectors due to either a fare way or better network by IndiGo.
The airline has since tried differentiating itself by flying on niche routes or under the aegis of Regional Connectivity Scheme (RCS) - UDAN ( Ude Desh ka Aam Nagrik). Spicejet has four stations which are a monopoly for the airline.
SpiceJet is concentrating on certain cities in its network with Surat being one of them. Surat will see connectivity to Jabalpur and Pune for the first time and reinstatement of flights to Patna, Jaipur, Bengaluru and Hyderabad.
This further strengthens its presence at Jabalpur and acts a deterrent for competition to enter. Since it commenced operations in 2006, IndiGo had a record of not abandoning any of the stations which it launched.
The record was shattered last year when it vacated Jabalpur - in the central Indian state of Madhya Pradesh. This was probably one of the first wins for competition against IndiGo and in this case it was Spicejet which held its fort strongly.
Another focus city will be Ahmedabad which sees its network reconnect Udaipur, Jaipur and Gwalior and additional frequency to Pune. All these routes are either monopoly or duopoly.
Picking up the fight and reaching out to foreign shores again
SpiceJet will reinstate its double daily frequencies on Delhi- Leh-Delhi sector, which saw IndiGo start a single daily flight in February. The airline will also up the frequency between Kolkata and Chennai.
As Maldives opens up and warms up to tourists from India, the airline will launch flights to Male from Mumbai and Kochi. These flights will be operational towards the end of July.
SpiceJet does not have a great record of operating sectors for the long run. The airline starts a lot of new routes but few have fizzled out even before they could start operating and many others have seen the airline withdraw prematurely without staying back for a fight. The airline also has the most number of routes by absolute number which remain non-operational under RCS-UDAN.
Is this early pull out a result of lack of adequate finances to sustain losses for the route to mature or is it part of a well thought out strategy of “hit and run” to make the most in a short period and vacate before the competition can push you around?
Time will tell how many of these sustain or are withdrawn but any airline expanding is a good sign in the current times and an indicator that travel is making a comeback.
08/07/21 Ameya Joshi/Moneycontrol
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