SpiceJet aims for international operations breakeven in 2 months

Low-fare airline SpiceJet is looking at over 80% load factor (which means more than 8 out of 10 seats on the flight being full) within the first month of commencing daily flights between Delhi-Kathmandu and a breakeven of international operations within the first two months.

The airline’s first international flight, between Delhi and Kathmandu, took off on October 7 and the daily Mumbai leg is slated to begin in March.

SpiceJet’s optimism on load factors is remarkable, since there are already seven flights a day between the Capital and Kathmandu by carriers such as Jet Airways, JetLite, Air India, Kingfisher and Nepal Airlines. Chief Commercial Officer Samyukth Sridharan claimed in a chat with DNA that SpiceJet will be offering the lowest fares on this sector.

“Being a low-cost carrier, we will remain focused on providing the best prices to customers. We have offered tickets at nearly half the existing price on Kathmandu and Colombo,” he said.

Sridharan explained that SAARC is a hugely underserved market, particularly by low fare airlines. While domestically, 7 out of 10 fliers board low fare carriers, only three in 10 do so on international routes because of the absence of low fare options.

Obviously Saarc is a big traffic driver for such airlines now.
SpiceJet is offering one way ticket to Kathmandu for as little as Rs 3,453 (all inclusive) versus an average fare of Rs 5,500-6,000 on other carriers. But travel agents point out that aggressive pricing will, in all likelihood, be phased out gradually and an all-out fare war on the Delhi-Kathmandu sector was unlikely.

“Legacy carriers may adjust their fares somewhat to attract fliers but a long term fare war looks unlikely for now...this is aggressive initial pricing,” TAAI president Rajji Rai said.

Meanwhile, Sridharan said that SpiceJet plans to operate up to seven daily flights each to Kathmandu and Colombo within the next six months as it looks to connect more Indian cities to Nepal and Sri Lanka.

Besides, the airline plans also to start flights to Dhaka and Male within a year. SpiceJet is the first Indian low fare carrier to fly internationally with flights from New Delhi to Kathmandu and from Chennai to Colombo.

Besides the Delhi-Kathmandu service, a daily Chennai-Colombo return flight was inaugurated on October 9.

Now, the airline is also considering connections from Kathmandu and Colombo to Mumbai, Kolkata, Ahmedabad and Bangalore for later.