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SpiceJet to raise global capacity to a fifth

Wednesday, 31 October 2012 - 6:57am IST | Place: Mumbai | Agency: dna

To add Guangzhou, Riyadh and Male by December.

SpiceJet,  India’s second biggest low-cost carrier by passenger numbers, is planning to take its international capacity to 20% of its total fleet capacity in the next two-three years from the current 5-6%. It is also looking to add three new international destinations by December.

Neil Mills, chief executive officer, SpiceJet, said the company would add Guangzhou and Riyadh from New Delhi and Male in Maldives from Thiruvananthapuram by the end of the calendar year.
“These destinations, like India, have a lot of bureaucratic hurdles which are almost over now. So by December we should be starting the operations there,” he said on the sidelines of the CAPA India Aviation Summit.

The carrier will add aircraft and destinations all through next year, which will help the company in increasing its passenger capacity.

“So the 5-6% international capacity that we have currently, we would like to see increasing to 15-20% in the next two to three years,” said Mills.

The airline, which currently is the number four aviation firm in India in terms of market share, flies to four international destinations of Kathmandu, Colombo, Kabul and Dubai.

SpiceJet, which slipped to the fourth position from third last month due to falling passenger volumes, currently has a market share of 18.5%.

“We have a cost base to support the volumes where they are now. I am not worried about the short-term correction in passenger volumes as this is driven by world record fuel prices, which is further artificially inflated with the infrastructure in India and the taxation policy,” he said, adding this has led to an increase in fares.

However, he said the company will not increase or decrease fares as it was pure demand-supply dynamics that keeps on changing depending on the season and traffic.

SpiceJet, Mills said, would also add newer routes in the India market, especially on the regional side, with its fleet of Q400s, but refused to comment on the new regional destinations.
“We have a shortlist ready and will take a call on that soon,” he said.

With 49% foreign direct investment allowed in Indian carriers, Mills said the company is open to selling some stake provided some interesting synergy comes through.

“I am not desperate for cash. I will only look into a deal if it brings something extra for me,” he said.

SpiceJet plans to add six new leased aircraft to its total fleet of 36 leased Boeings and 12 company-owned Bombardiers.

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