SpiceJet looks at small cities, may hike fares

Low-cost carrier SpiceJet would adopt a two-pronged strategy - increase airfare and improve efficiency - for better margins, said Neil Mills, chief executive office of Spicejet Limited.

The increase in fare may happen due to the rising fuel cost. "We have not decided when and by how much we will increase the fare. We will be more strategic not to put all the cost burden on the passengers," he said.

Oil companies revise jet fuel prices every fortnight based on the average international price in the preceding fortnight. Since October last year, the aviation turbine fuel (ATF) prices have gone up by about 45 per cent.

He said low-cost aircraft going to small cities was the new game changing factor. "We have chosen 20 airports in Tier II and III cities, mainly in south, central and eastern India, including Vijayawada, Rajamundry, Mysore and Man-galore."

SpiceJet would add another 100 pilots to its exis-ting network of 300 in the next one year and a Boeing aircraft by the year end. "We are looking at adding 12-14 new flights in a couple of weeks," Mills said.

In pact with GHIAL

GMR Hyderabad International Airport Limited (GHIAL) on Monday entered into a strategic partnership with SpiceJet to become the first base for the latter's operations for its new fleet - Bombardier Q-400, a commercial aircraft from Canada-based Bombardier Inc.

The Q 400 is the first commercial aircraft from Bombardier to be launched in India here, Trung Ngo, vice president (sales Asia-Pacific), Bombardier, said. Bombardier is the third largest commercial aircraft in the world.

SpiceJet would raise $450 million to buy 15 Q 400 aircraft by June 2011. It aims to have a fleet of 70 aircraft by 2013-end, with a mix of 45 Boeing and 25 Q400 planes.

Q 400 costs around $30 million and has a 78-seat capacity. There are 300 Q 400 aircraft in operation mostly in the US, Japan and Australia.

"The Hyderabad airport has an expandable capacity up to 40 million passengers from the current 12 million. The demand for Q 400 aircraft is of 70 million passenger across 19 cities," Vikram R Jaisinghani, chief executive officer, GHIAL, said.

MRO at airport

The maintenance, repair and overhaul (MRO) at the Hyderabad airport is expected to be operational by July this year, he said.

"As the MRO needs skilled manpower to function, the employees are currently under training. We would get a clear picture in the next 3-4 months," he added.