Lower costs, regional expansion could make SpiceJet margins fly high

Analysts said that the new routes could enhance utilisation for the Boeing 737-800 and Bombardier Q400 aircraft, which will be deployed for these routes

The SpiceJet stock gained 4.3 per cent, thanks to the introduction of new regional routes and expectations of improving profitability from FY21. The carrier launched 20 new flights effective March-end, which will add to its existing network and, more importantly, to a couple of regional routes.

With the latest additions, flights under the regional connectivity scheme have now increased to 52 destinations — the highest in the sector. Yields from regional destinations tend to be higher, given the shorter distance and lower competition, compared to the pricing pressures in busier routes including metros.

Analysts said that the new routes could enhance utilisation