Looking to spread its wings farther on rising passenger demand, SpiceJet is mulling operating low-cost long haul flights with new aircraft.
After sealing a Rs 1.5-lakh-crore deal with Boeing for buying up to 205 new planes, most of which are 737-MAX ones, the airline would explore new markets as this class of aircraft can fly for longer hours.
SpiceJet Chairman and Managing Director Ajay Singh today said the idea of low-cost long haul flights is "at infancy" and would be explored further provided the business model is workable.
Only a handful of airlines, including Singapore-based Scoot and Malaysia's AirAsia X, have attempted flying low-cost long haul flights and some of them have been doing good.
"We would also explore the possibilities of commencing low-cost long haul flights in future. We will study this... We are keeping the option open if we think in the future that we can run economically-viable and profitable operations," he said.
He said the airline is looking at the economics of wide body, low-cost long haul format while the kind of planes that can be used is to be decided.
"The narrow body MAX aircraft itself gives us bigger range... So now the four-hour flights can be five-hour flights and that opens up several new destinations to explore," the SpiceJet chief said.
According to him, for Indian market -- where there is a large population, increase in disposable income and forecast suggesting higher GDP growth -- there is very little reason why people would not want to travel to different parts of the world provided those flights come at a cost which is affordable".
"If you can stimulate that market with lower fares and that stimulation is possible only if you bring down the cost down on a unit basis. If we find that there is a model that works, we will certainly explore it," he said.
At present, SpiceJet has 32 next generation B737s and 17 Bombardier Q400s. It flies to 45 destinations, including six international ones, while average number of daily flights is 336.
Singh also noted that the airline would keep exploring and target new markets provided flying there is financially viable.
The latest deal with US aircraft maker Boeing for up to 205 new planes is valued at Rs 1,50,000 crore (USD 22 billion) at current listing prices.
With the earlier order for 55 planes and additional 100 new 737-8 MAX aircraft, the no-frills carrier now has firmed up order for a total of 155 planes, besides purchase rights for 50 B737-8 MAX and wide body aircraft.
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