SpiceJet opens bookings beyond March, but no deep discounts yet

Development comes as airline awaits investments of about Rs 1,500 cr from founder promoter Ajay Singh

SpiceJet on Thursday opened flight bookings beyond March 29 till October 24 this year, though the troubled low-cost carrier refrained from offering any deep discounts, pricing its tickets at par with key rivals IndiGo and Go Air.

The development comes as the airline awaits investments of about Rs 1,500 crore from founder promoter Ajay Singh, the first of three tranches of which will come in January, and the last by March this year.

”SpiceJet is pleased to announce that bookings for its flights is now open for its summer schedule that commences from March 29, 2015, and goes through October 24, 2015. SpiceJet ‎thanks its customers, employees, partners, and suppliers for their support as it continues on its re-structuring and turnaround plan,” the company said in a statement.

The airline, which has liabilities of Rs 1,400 crore and is making daily payments to airports and fuel companies, plans to now operate a daily schedule of 280 flights in the summer, slightly higher than its current schedule of 230. However, this is still sharply lower than the 340 daily flights it operated at its peak in July last year. The airline has cut its fleet to 34 (19 Boeing B737 and 15 Q400s), from 50 in mid-2014.

Across last year, the airline was a regular price warrior with several flash sales starting January 2013 that came into criticism from both rivals and regulator Directorate-General of Civil Aviation (DGCA). In fact, one instance of selling tickets at Re 1 were stopped the same day by the DGCA, which called it “predatory pricing” tactics, though the airline said it was selling very limited seats to fill up what would otherwise have flown empty.

AirAsia is the other airline that has followed a similar strategy both overseas and in India, and heavy discounting has since been a regular affair, with even state-owned full-service Air India last week cutting domestic fares by half in a seven-day sale and forcing rivals like IndiGo and Jet Airways to follow suit.

“Good to see other Indian carriers have sales to stimulate demand. We took heat for it. But was and is the right thing to do, if done right,” SpiceJet’s COO Sanjiv Kapoor (@SKapoorSpiceJet) said in a tweet on Wednesday.

While SpiceJet’s discount schemes helped it improve both load factors and market share, legacy losses caught up – it posted record Rs 1,003 crore net loss in FY14, leading the airline’s finances to nosedive from the first week of December. It was then forced to almost halt operations for two days in the month because fuel companies denied supply on payment of dues.

Meanwhile, even lessors have reportedly asked DGCA to de-register 11 aircraft so that they can be taken back. SpiceJet has accumulated losses over Rs 3,000 crores and a negative net worth of almost Rs 1,500 crore as of Q2FY15.
The SpiceJet scrip at the BSE closed 4.74% up to Rs 22.10 on Thursday.

No heavy discounts: SpiceJet’s pricing strategy versus rivals
	April 8; Del-Mum	June 12; Del-Kol	Oct 10; Mum-Del
SpiceJet	3,052	4,694	3,276
Go Air	3,051	3,906	3,275
IndiGo	3,054	3,910	3,278
Air India	4,852	3,961	4,232
Jet Airways	3,263	4,904	3,486
Souce: Makemytrip.com