)
Two days after AirAsia group chief Tony Fernandes said IndiGo’s attempts at hindering launch operations would only make his airline stronger, SpiceJet’s Chief Operating Officer Sanjiv Kapoor, noting the expansive presence of the Rahul Bhatia-promoted carrier in the domestic market, spoke of the need to differentiate service offerings and improve yields.
“I do not think there is room for two IndiGos. They have their own clientele. They are doing a fabulous job. They are growing and it is difficult to match IndiGo. We have to create our special place,” said Kapoor.
He elaborated that given the high-cost operating environment in the domestic aviation market, if an airline did not have scale, the only way for it to sustain operations viably was to focus on improving yields.
Also Read
Kapoor said, “The cost floor is so high, you cannot price your tickets below a certain level to stimulate people who travel by buses or trains to fly. It is difficult to pursue an ultra low-cost model in India. If you don’t have scale, you need to get yields. You need to attract corporate travelers. We are heading towards a hybrid model. We will be launching our premium economy seats soon.”
SpiceJet is working on introducing premium economy seats across its fleet of 37 Boeing 737s within the next few days. The airline is removing three seats from each of its aircraft to accommodate five rows of seats with extra leg-room. SpiceJet has also partnered TajSats and Café Coffee Day to introduce an all-new food and beverage menu to enhance its in-flight experience. These initiatives, with redesigned route network, SpiceJet feels, would help draw corporate customers.
Drawing a parallel, Kapoor explained if IndiGo is to operate like British Airways, SpiceJet is working towards becoming a JetBlue or Virgin Atlantic in Indian skies.
As to competition from AirAsia India, which has promised to offer ‘nano fares’ lower by 30-35 per cent than prevalent rates, Kapoor said, “There is one way to do that. That is to have a lower cost structure. But you can have that kind of costs in Kuala Lumpur, not India.”
SpiceJet, on its part, has upped marketing spends to encourage people to try it. "We have increase marketing spends but it is in check. It is looking a lot because we had not done much earlier. You cannot turn an ocean liner around overnight but we are starting to move in right direction as relates to revenues, costs, network, in-flight experience, ground service, product offerings and pricing. Turnaround will be very visible," Kapoor said.
On the network front, the airline plans to increase the frequency of flights in the domestic market. In the international market, it plans to operate to Dhaka soon and add more flights to Dubai and Kabul. Bangkok flights will be back when the situation in Thailand improves. The airline is also exploring possibilities to start services to Hong Kong later.
Separately, SpiceJet today denied that it is in talks with Qatar Airways for sale of slots. The airline confirmed that it is in talks with certain potential investors but has not taken any decision about a possible stake sale. Speculations about measures for probable capital infusion had been doing the rounds since the airline announced losses of Rs 1003 crore for the financial year ended March 31, 2014.
In a statement to the Bombay Stock Exchange (BSE), SpiceJet said, “…the Company denies having any discussion with Qatar Airways for the sale of overseas slots, as reported. We also confirm that there is no truth whatsoever in the scheduling of a meeting to discuss investment plans with Qatar Airways."
The no-frills carrier has, however, applied to the Directorate General of Civil Aviation (DGCA) to fly 7000 seats to Doha.
