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Buoyant SpiceJet plans to acquire more aircraft

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Neil Mills
Neil Mills

The second largest budget carrier is eyeing a 15-20 per cent capacity addition on the international network in the next two-three years.

The Chennai-based no-frills carrier SpiceJet today said it is planning to acquire more aircraft as it expands its domestic and international footprint.

The second largest budget carrier is eyeing a 15-20 per cent capacity addition on the international network in the next two-three years, Neil Mills, Chief Executive of the airline said on the sidelines of CAPA-India aviation summit here.

“We will continue to add more international routes. We are looking at 15-20 per cent capacity addition on global network over the next two-three years from the current 6 per cent of the total capacity. Domestic routes will also continue to grow mainly on the regional market,” Mills said.

Mills said the carrier had not decided about the type of aircraft—Boeing or Airbus or both— it plans to acquire.

Recently the aviation think-tank Centre for Asia Pacific Aviation (CAPA) had said in a report that SpiceJet was evaluating the purchase of 30-40 Boeing MAX planes.

SpiceJet currently has a mix of Boeing 737s (36) and Bombardier Q400s (12) in its fleet of 48 planes. It would add three more Bombardiers by December, one of which will be deployed on the proposed Thiruvananthapuram-Male route.

Besides it will launch services to the Chinese city of Guangzhou and Riyadh in December with a Boeing 737.

In addition, the carrier will also take delivery of six brand new leased aircraft next year, Mills said, adding “we will also use the leasing options to expand”.

Discounting the reports suggesting that funding of the aircraft acquisition was a challenge, Mills said it is not an issue as, “the three Bombardier Q400s are to be funded through the EDC (Export Development Canada) facility.”

On the fund raising prospects Mills said the airline is not in a hurry to mop up funds as it is paying all bills and salaries to its employees on time. “We have been looking at opportunities (funding) but we don’t need it tomorrow. We are not desperate too much.”

Stating that the carrier is open to investment from any quarters, Mills said, “It could be with anybody. But it should make sense for us and our shareholders.”

High jet fuel cost and airport charges are eating into industry’s revenue, he said, but expressed hope the festival season may lead to higher load factor.

On SpiceJet’s plan to directly import jet fuel (which currently accounts for nearly 50 per cent of operational cost) Mills said the shipments would start as soon as the last `bureaucratic hurdle’ is cleared.

(This article was published on October 30, 2012)
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