Dubai debt crisis may have impact on SpiceJet

Istithmar, the private-equity arm of the Government of Dubai, invested USD 12.5 million dollars in SpiceJet in the early 2005 reports CNBC-TV18’s Sonia Shenoy. The street is having some concerns about Istithmar liquidating of this particular stake.
We have spoke to a whole host of analyst who track SpieJet very closely and they said that this is purely a sentimental impact. One needs to wait and watch what kind of impact this would have -- indeed of course SpiceJet is looking to raise money. So that maybe a bit of a concern going forward. But of course then that concern lies with every company that would have exposure to the UAE. It is too early to predict at this point in time that is what some of the analyst have really told us.
27/11/09 CNBC-TV18/Moneycontrol.com

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Spicejet not aware of any change by Istithmar

New Delhi: Spicejet said on Friday it was not aware of any change in investment strategy by Dubai World's Istithmar, which owns 13 percent of the low-cost carrier.
Istithmar is an alternative investment house that is fully owned by Dubai World.
27/11/09 C.J. Kuncheria/Reuters

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Battle for mind space

As full-service carriers invade the no-frills space, SpiceJet is finding new ways to bond with customers.
If you visit a travel portal, and search for the best available air fares between Delhi and Mumbai, you will find that every airline is offering similar fares. That’s the biggest challenge facing budget carriers like SpiceJet since they began flying.
The fare differential they enjoyed with other airlines, which was their key selling point, has disappeared as full-service airlines (FSAs) like Jet Airways and Kingfisher shift more and more flights to their no-frills options like Jet Konnect and Kingfisher Red.
To understand the challenge faced by the low-cost carriers (LCCs), look at the passenger traffic numbers put out by the Directorate General of Civil Aviation (DGCA) for October. While Jet Airways increased its market share to 19.8 per cent on the back of its all-economy configuration Jet Konnect, SpiceJet ’s market share fell to 12.4 per cent from 13.2 per cent in September. Other LCCs showed a similar dip.
It’s a wake-up call for budget carriers like SpiceJet which now have no option but to reinforce their positioning, differentiate or find new ways to bond with customers. That’s what SpiceJet is trying to do through a brand campaign and other initiatives. ‘‘You need to differentiate on service, quality and create top-of-the-mind recall,’’ says SpiceJet CEO Sanjay Agarwal.
Anish Srikrishna, senior VP (marketing), SpiceJet , says the challenge for airlines is to start differentiating on factors other than price. “That’s where branding comes in; we are fighting for her mindspace, intangibles such as the likes and the dislikes of a customer,’’ he says.
Some consumers may like the colour of a plane, others may have heard about the service of another airline, some may have heard of an airline reputed to be serving food while others may associate an airline with hassle-free flight. These are subjective, experiences unique to a customer, or perceptions that may get built over time.
23/11/09 Ranju Sarkar/Business Standard

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Sundaram BNP Paribas hikes stake in Spicejet to 5.35 pc

Mumbai: Sundaram BNP Paribas Mutual Fund, a subsidiary of Sundaram Finance, has increased its stake in Spicejet to 5.35 per cent from the existing 4.72 per cent.
Sundaram BNP Paribas Mutual Fund acquired over 15.13 lakh shares of the low-cost airline through open market purchases, Spicejet said in a filing to the Bombay Stock Exchange.
Sundaram BNP Paribas picked up the equity shares from the open market on November 13 for over Rs 6.78 crore, it said.
This resulted in Sundaram BNP Paribas owning 1.29 crore shares of the low-cost carrier, it said.
Prior to this latest acquisition, Sundaram BNP Paribas held over 1.13 crore equity shares, representing 4.72 per cent stake of the low-cost airline, it said.
19/11/09 PTI/Economic Times

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GoAir, SpiceJet deal enters air pocket

A possible merger between low-cost carriers SpiceJet and Wadia Group-owned GoAir has hit a roadblock after the two sides failed to arrive at a consensus on valuation and branding related issues, two persons familiar with the development, told ET NOW.
SpiceJet and GoAir have an agreement of exclusive negotiations till March 2010 to execute the deal. One of the key stumbling blocks was the amount of unsecured loans on GoAir’s balance sheet, said the first person on conditions of anonymity. The other executive said the two companies were close to signing a memorandum of understanding (MoU) three weeks ago, but could not agree on a share swap ratio to execute the transaction.
A spokeswoman for GoAir said the talks of a proposed merger were baseless. She said, GoAir has categorically stated that the decision taken by the board of the company is not to proceed with any such proposal and focus on its plan of inducting to its existing new fleet of 8 aircraft another 12 aircraft completing its order of 20 Airbus, which the company bought in 2007 for $1.2 billion. Repeated attempts to contact SpiceJet officials and a detailed e-mail query to the company did not elicit any response.
ET NOW has learnt the cashless transaction was to be executed through a share swap agreement between the promoters of GoAir and its shareholders and the promoters of SpiceJet and its shareholders.
17/11/09 Mohit Bhalla & Paramita Chatterjee/Economic Times

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Lost baggage: Airline told to pay Rs 30K as damages

Chandigarh: Dismissing the appeal made by Spicejet Limited —wherein it claimed that its liability in case of loss of luggage was only Rs 1,900 —
and upholding directions passed by the district forum, the state consumer commission has asked the airline to pay Rs 30,000 as compensation, Rs 5,000 as litigation cost and Rs 3,000 for misplacing the baggage of Sector-8 resident Rohini Chadha.
According to information, Rohini had booked two Spicejet return tickets from Chandigarh to Mumbai. The payment was made by credit card and the return journey was scheduled for January 27, 2007.
The complaint mentioned that Rohini had four bags weighing 40 kg when she boarded the return flight for Delhi from Mumbai. The luggage was handed over to the airline officials at the airport.
But on reaching Delhi, only three bags were delivered to her. Rohini reported the matter to the officials who assured her that the misplaced luggage would be located and delivered to her in Chandigarh.
However, the complainant was in for a rude shock after airline officials informed her of the bag’s loss. A cheque of Rs 1,900 was also sent to her as compensation.
15/11/09 Supriya Bhardwaj/Times of India

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Free Spicejet for children

Bangalore: SpiceJet announced an interesting promotion offer for Children's Day. Children get to fly free on all bookings done on November 13 and 14. Only the statutory charges ranging between Rs 229 and Rs 604 will be charged. Also, a special bag of goodies await all children who fly on November 14 on any flight of the SpiceJet network.One child ticket will be free with every adult booking. Guests can log on to www.spicejet.com to avail this offer.This offer is open between December 2009 and June 2010. It is not valid for unaccompanied minors.
14/11/09 Times of India

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CISF seizes entry pass of airline duty manager

Chennai: A senior Central Industrial Security Force (CISF) official posted at Chennai airport on Friday snatched the entry pass of a duty manager of a private airline and sent him out unceremoniously because he allegedly carried a floral bouquet to receive chief minister M Karunanidhi. The pass was later returned after an explanation was given.
A senior AAI official said bouquets should not be taken to the apron side when there was VIP movement.
The incident occurred in the apron area where several people, including senior airport officials and others, were waiting for the chief minister to arrive.
CISF official snatched the duty manager's pass and instructed a constables to escort him out of the terminal.
Sources said the duty manager had informed the CISF he would be presenting a bouquet to the chief minister who was flying by SpiceJet for the first time.
07/11/09 Times of India

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Airlines flying in losses on discounted fares

Beset by a string of troubles, the three major listed airline players — Jet Airways, Kingfisher Airlines and SpiceJet — ended yet another quarter with sizable losses. A reduction in fares weighed on realisations and revenues and resulted in continuing losses, even as airlines managed savings in fuel and operating costs.
Both Kingfisher Airlines and SpiceJet have reduced their losses for the quarter, compared with last year, while Jet Airways saw its net loss going up by about 5 per cent to Rs 406.69 crore in the September 2009 quarter. Impacted by the five days of strike in September, Jet Airways was faced with an estimated loss of Rs 100.8 crore ($21 million). This includes the variable cost of cancellation.
A shift in favour of low-cost carriers was evident from SpiceJet registering a near 27 per cent year-on-year increase in income from operations, even as both Kingfisher Airlines and Jet Airways witnessed about 14 per cent and 25 per cent dip in their topline.
Revenues for Jet Airways and Kingfisher Airlines were impacted mainly by falling fares, which they attributed partially to the lean season. However, both airlines, faced with excess capacities, have taken measures to trim their fleet size over the past six months. While Jet Airways reduced its seats availability by as much as 30 per cent (including domestic and international), Kingfisher Airlines made its domestic operations leaner by about 18 per cent compared with last year. The cut back has not only helped companies save on the cost front, but also improved the load factor.
Jet Airways saw its passenger load factor (domestic and international) increase from 66.3 per cent for the quarter ended September 2008 to 77 per cent in the recently concluded period. The company’s domestic and international loads grew by 2.9 per cent and 14.6 per cent respectively in this period. Kingfisher Airlines registered a 1.8 percentage points growth in its load factor during this period.
04/11/09 S. Hamsini Amritha/Business Line

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