SpiceJet Chairman and Managing Director, Ajay Singh has yet again called for bringing in ATF under the GST ambit. The carrier will be inducting 15-20 flights in its fleet, while it is on course for spinning off its cargo operations into a separate company.   Speaking to BusinessLine on the sidelines of an Assocham programme, Singh said geo-political tensions following Russian invasion of Ukraine will lead to further shoring-up of crude prices thereby piling up cost pressure on the sector.   Continued cost pressure and high taxation incidence will lead to a corresponding hike in air fares.   “Crude has already crossed $100 a barrel level and this is at record high levels. The high taxation will only impact our headline operations. So taxation has to be at levels where it does not exert additional pressure. So states must work towards it and ATF needs to be brought under GST, “ he said. Air Turbine Fuel or ATF accounts for nearly 30 per cent of airlines operating costs.   “Only increasing air fares will impact demand at some point of time,” Singh said. He is also the Vice Chairman Designate of Assocham.   Air passenger demand, post-Omicron, is bouncing back and is currently at 75 per cent of pre-Covid levels.   SpiceJet’s induction of 15-20 new aircrafts in it’s fleet is expected over the next few months. Aircrafts will be leased. “A significant number of these airlines will fly on international routes, as and when they are opened, “ Singh said.   Scheduled commercial international flights to/ from India continues to be suspended till date since the outbreak of Covid and India going into a lockdown in 2020.  

Listing of cargo arm

According to him, SpiceJet is also looking at listing of it’s cargo arm, SpiceXpress. Spinning-off the cargo division into a separate entity is already begun and it is likely to be completed in the next two to three months. In Q3FY22 (Oct–Dec), the logistics segment reported a 17 per cent increase in revenue to the tune of ₹584 crore and a net profit of ₹67 crore. The company plans to significantly increase freighter capacity in coming quarters. The company is also experimenting with drones and is experimenting delivery mechanisms in select categories.   “Listing requires some SEBI conditions to be fulfilled. But the process, where the (cargo) unit is separated from the parent, is on and it is likely to be completed in the next two to three months,” Singh said.

Evacuation flights

Low-cost carrier SpiceJet will participate in Operation Ganga for evacuation of Indian students stuck in Ukraine.    According to him, evacuation flights will start Monday onwards. While no decision has yet been taken on the ticket price, the Centre will bear the cost. “Our first evacuation flight will leave tonight. At the moment we have been told that the Government will bear the cost ,” he said.   The airline will use the Boeing 737 Max aircraft for the operation. The flight to Budapest will depart from New Delhi’s Indira Gandhi International Airport, and will return to Delhi on March 2. The flight will operate via Kutaisi, Georgia. Apart from Tata Group-led Air India, the country’s largest carrier IndiGo has also stepped into evacuation efforts.   IndiGo will be operating one flight each to Budapest and Bucharest (Romania) through Istanbul to bring back stranded Indians from Ukraine. The two are expected to be back in India by Tuesday.