SpiceJet

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SpiceJet
SpiceJet logo.svg
IATA
SG
ICAO
SEJ
Callsign
SPICEJET
Founded 1993 (as ModiLuft)
Commenced operations 5 May 1993; 20 years ago (1993-05-05)
Hubs
Secondary hubs
Focus cities
Frequent-flyer program SpiceJet MAX[2]
Fleet size 58 (+70 orders)
Destinations 54
Company slogan Flying for everyone
Parent company Sun Group
Headquarters Gurgaon, India[3]
Revenue US$731.46 million (2012)
Net income -US$113 thousand (2012)
Employees 2,349 (2012)
Website spiceJet.com

SpiceJet is an Indian low-cost airline owned by the Sun Group of India.[3] It has its registered office in Chennai, Tamil Nadu, and a corporate office in Gurgaon, Haryana.[4] It began service in May 2005, and by 2012, it was India's third largest airline in terms of market share, ahead of Air India, Kingfisher Airlines, and GoAir.[5] SpiceJet operates aircraft configured with a single passenger class. Along with passenger services, SpiceJet also offers cargo services on the same flights. The service is available on flights connecting Ahmedabad, Agartala, Amritsar, Bagdogra, Bengaluru, Chennai, Coimbatore, Delhi, Goa, Guwahati, Hyderabad, Jaipur,Jabalpur, Kochi, Kolkata, Kozhikode, Madurai, Mumbai, Pune, Visakhapatnam, Tiruchchirappalli, Tuticorin and few international cities. Between 2 to 3.5 tons of cargo is ferried on each flight ensuring maximum utilisation of the aircraft.[6]

History[edit]

1993–1996: ModiLuft era[edit]

A Boeing 737-200 in a livery similar to that of Lufthansa.

The origins of SpiceJet track back to February 1993 when ModiLuft, one of India's first post-deregulation airlines that was launched by the Indian industrialist S K Modi, in technical partnership with the German flag carrier Lufthansa. The airline project was started in February 1993 by S. K. Modi, Ashutosh Dayal Sharma and Kanwar K. S. Jamwal and on 5 May 1993 took the first flight from New Delhi to Mumbai. The airline actually started operations within three months of its conception – a record of kinds in itself. It maintained very high standards in flight safety, ground maintenance, and on-time performance, owing to a strong support from Lufthansa AG. The team consisting of Indian and German technical staff and pilots was built by Kanwar K S Jamwal, general manager Projects, a thorough professional himself, was responsible for setting up the Airline and its operations. Captain R. L. Kapur and Retired First officer Cdr. S. Raj, along with a team of airline experts helped further, in meeting the highest standards in the aviation industry and in conforming to the Indian Aircraft Rules set by the Director General Civil Aviation. The first two batches of the cabin crew were extensively trained at the flight crew training facility at Frankfurt. Modiluft was perhaps the only Airline to achieve an average aircraft utilisation of a minimum 12 hours per day in Indian Skies. This was no ordinary feat, as it required constant supervision, resources and a team of thorough professionals at every level to make this possible.

ModiLuft was the only airline in India to fly a three class configuration compared to others airlines, It had a First, Business and an Economy Class and an incident free track record of flying. It used Boeing 737-200 aircraft leased from Lufthansa. ModiLuft did not last very long specially because the business parity of the German and Indian partners was not the same and problems arose. Then the co-operation was broken off and ModiLuft acquired Boeing 737-400 aircraft to replace the 737-200s from Air UK, but the future of ModiLuft was already sealed and the airline ceased operations in 1996. However, the air-operating certificate (AOC) of ModiLuft did not lapse and the airline due to lack of funds changed hands and renamed Royal Airways. In 2004, management of the airline was taken over by Sanjay Malhotra and Ajay Singh, who renamed the company, raised funds and restarted operations. Thus, Spicejet was born following the low-cost model.[7] SpiceJet leased 3 Boeing 737-800 Next Generation jet aircraft. SpiceJet chose to buy in modern Boeing NGs.[8] On 7 March 2005, the Airports Authority of India approved three overnight parking slots (for aircraft) to SpiceJet, with two in Delhi and one in Mumbai. They announced that flights will commence in May after the first of the 30 Boeing 737-800 aircraft arrive in April.[9]

2005–2012: Inception and expansion[edit]

A SpiceJet Boeing 737-900ER taking off from Sardar Vallabhbhai Patel International Airport in Ahmedabad

SpiceJet opened bookings on 18 May 2005 and results followed immediately as over 37,000 were booked out in just one day, setting a new record in the Asian continent. Red Hot Special Fares were introduced ranging from INR99 (US$1.70) to INR799 (US$13).[10] The first flight was flagged off by the Union Minister of Civil Aviation, Shri. Praful Patel. The first Boeing 737-800 aircraft left Delhi for Mumbai via Ahmedabad on 24 May 2005.[11] It was very successful and by 2008, it was India's second-largest low-cost airline in terms of market share. In late 2007 media billionaire Keyur Patel of Fuse Group was approached by the company for investment in SpiceJet of US $ 20M. On 15 July 2008 billionaire Wilbur Ross suggested he would invest INR3.45 billion (US$58 million) in the airline. SpiceJet accepted an offer in principle from a US-based private equity firm that would make these funds available. Indian media baron Kalanidhi Maran acquired 37.7% in the business in June 2010.[12][13] In early 2012, SpiceJet suffered from a loss of over INR390 million (US$6.5 million) as fuel prices were reported to have jumped up by as high as 90%. The money that SpiceJet spent on fuel has exceeded well over 50% spiraling the airline into losses.[14] As of 2011 Spicejet owed the state Rs. 366 million for availing airport facilities[15]

On 9 January 2012, the Directorate General of Civil Aviation, reported that several airlines in India, including SpiceJet, have not maintained crucial data for the flight operations quality assurance or the FOQA.[16] The Bombay stock exchange later announced that ever since June 2011, Spicejet had been suffering losses in millions of rupees. BSE reported that SpiceJet suffered a loss of INR719.64 million (US$12 million) in March–June, INR2400.67 million (US$40 million) in June–September and INR392.60 million (US$6.6 million) in September–December. The airline's quarterly income also went down in June–September 2011, but somehow the airline managed to pull its income up to INR11758.34 million (US$200 million) by December to recoup cumulative losses.[17] Despite the losses, Kalanithi Maran doubled his stake in Spicejet to 16% by investing INR1 billion (US$17 million) in the airline. Maran believed that SpiceJet was going through financial distress because of the steadily rising costs of Jet fuel. The airline's market share at the time was a little over 16% making it the fourth largest airline in India. Neil Mills said that the airline was making preparations so as to directly import jet fuel reducing operational costs.[18] The year end turned out well enough for SpiceJet as the airline returned to making profits.[19]

2013 and beyond[edit]

Contrary to reports that SpiceJet will be selling a stake to Tigerair, SpiceJet will launch its first interline pact with Tigerair on 16 December 2013. The first phase will allow SpiceJet to sell SpiceJet to Tigerair flights in one booking reservation while the second phase will allow Tigerair to sell Tigerair to SpiceJet flights in one booking reservation. All SpiceJet flights to Singapore will be via Hyderabad.

Destinations[edit]

Revenue Passenger Kilometres (Total)
Year Traffic
2008 4397
2009 4819
2010 6807
2011 8639
2012 10322
Source:SpiceJet annual reports

Spicejet is currently operating over 350 flights daily to 46 Indian and 10 international destinations. The airline flies Boeing 737-800 and −900ERs to Tier I cities and Bombardier Dash 8 Q400s to Tier II and Tier III cities. After completing 5 years of flying, SpiceJet was allowed to commence international flights by the Airports Authority of India on 7 September 2010. Spicejet launched flights from Delhi to Kathmandu and Chennai to Colombo. The first international flight took off on 7 October 2010 from the Delhi airport.[20] In April 2011, SpiceJet announced that they chose Hyderabad's Rajiv Gandhi International Airport as the first and primary base for its new fleet of Bombardier Q400 NextGen aircraft. From Hyderabad, SpiceJet launched flights to Aurangabad, Belgaum, Bhubaneswar, Goa, Indore, Madurai, Mangalore, Nagpur, Nasik, Raipur, Rajahmundry, Tirupati, and Vijayawada with the new fleet.[21] On 12 January 2012, SpiceJet's fleet went up to 40 as Boeing delivered a brand new 737-800 aircraft. SpiceJet announced on its website that they would be launching flights on Surat—Delhi and Surat—Mumbai routes following several requests from the carrier's fans on the social media network Facebook. Around 6 days later, SpiceJet's market share rose by 2.5% after the aviation and finance ministries announced that foreign carriers can now buy up to 49% stake in Indian carriers, including the national flag carrier, Air India.[22]

In January 2013, SpiceJet announced a sale on its website. The airline offered 1 million seats on all domestic flights between 1 February and 30 April at INR2013 (US$34).[23] The sale was announced a day after rail fares were hiked by the government. CEO Neil Mills said that "The offer truly provides an opportunity for all air travellers to fly at such a low price. The scheme offers an opportunity for travellers to fly even at lower than train fares."[24] Initially, the sale had industry sources fear that other airlines would follow suit by lowering prices, thereby resulting in a fare-war.[25] The sale drew heavy traffic to the official website resulting in a crash. This prompted SpiceJet to limit the number of users who could use the website at the same time. On the first day before 5 p.m. in the evening, SpiceJet sold 170,000 of the million tickets.[26] The discounts SpiceJet offered promoted advance bookings which earned SpiceJet INR1.4 billion (US$23 million). The airline reportedly sold out all the 1 million seats it offered.[27]

Fleet[edit]

SpiceJet placed its first firm order for 20 Next-Generation Boeing 737-800s in March 2005, with deliveries scheduled up to 2010.[28] Again in November 2010, SpiceJet order for another 30 Boeing 737-800s with winglets in the presence of the American president, Barack Obama. Neil Mills, the chief executive officer of SpiceJet said "We are extremely satisfied with the Next-Generation 737—an airplane that is reliable, allows for greater efficiency in maintenance and supports the business plan for low-cost carriers".[29] On 9 December 2010, Bombardier Aerospace announced that SpiceJet placed a firm order for 15 Q400 NextGen turboprop airliners and has also placed an option to buy another 15 of those. SpiceJet used its fleet of Q400s for short-haul operations.[30] Each aircraft in the SpiceJet fleet is named after a spice[31][32] SpiceJet sold five of its old Boeing 737-800 to other operators on receiving new ones. One of the five was SpiceJet's own which is now in the possession of Somon Air.[33] In February 2012, SpiceJet announced that it would take the delivery of ten more aircraft during 2012, of which seven would be the Bombardier Q400.[34] In March 2014, Spicejet signed a $4.4 Bn deal with Boeing for procurement of 42 737-8 MAX aircraft.[35]

As of April 2014, the airline has the following fleet:

SpiceJet fleet
Aircraft In Service Orders Passengers
(Economy)
Notes
Boeing 737-800 37 0 189 19 dry leased
Boeing 737MAX 42
Boeing 737-900ER 6 212
Bombardier Dash 8 Q400 15 15 78 1 dry leased
Total 58 57

Historic fleet[edit]

As ModiLuft, the airline had operated the following fleet of aircraft.

SpiceJet historic fleet
Aircraft Operated Introduced Retired
Boeing 737-200 4 1993 1996
Boeing 737-400 3 1995 1996

Services[edit]

In-flight entertainment[edit]

SpiceJet provides little in-flight entertainment. MaXposure Media Group, an integrated media solutions company publishes SpiceRoute, the official in-flight magazine in 125 flights to 18 destinations daily.[36]

SpiceJet MAX[edit]

SpiceJet MAX is a combo offer provided by the airline that includes a choice of meal on board, seat preference at the time of booking, and a Priority check-in at the airport. SpiceJet MAX can be bought per passenger per sector for all passengers. It can be bought along with any fare two hours prior to departure. Meals are provided on all Boeing aircraft while snacks are provided on Bombarider Dash 8s. In the airports at Ahmedabad, Bengaluru, Mumbai, Kolkata, Delhi, Hyderabad, and Chennai, SpiceJet MAX guests are provided assistance at a dedicated SpiceJet MAX counter and are checked in first. The airline calls this feature Priority check-in. The cost of availing SpiceJet MAX is INR500 (US$8.40) on domestic flights and INR1000 (US$17) on international flights.[2]

Awards and achievements[edit]

As of 31 December 2012, SpiceJet had won the following awards.[37]

  • India’s Best Low Cost Airline by Outlook Traveller (2008, 2010, 2011 & 2012)
  • India’s International Low Cost Carrier of the Year- 2012 by Travel Agents Association of India. (TAAI)
  • India’s Most Outstanding Airline LCC-Domestic Award, by Travel and Hospitality. (2012)
  • Best Website at 'World Low Cost Airlines Asia Pacific Conference'. (2010 & 2012)
  • CIO 100 Award in IT efforts for customer satisfaction and business growth category. (2007, 2008, 2009, 2011 & 2012)
  • India’s best low-fare airline in a survey conducted by MaRs on behalf of Hindustan Times (Dec 2009)
  • World Travel Market Award for multi-channel approach in distribution. (2009)
  • National Award (ICWAI) for excellence in Cost Management. (2009)

Revenue[edit]

Revenue by year
Year Trend Total Income Reference
2000 Steady INR5.37 million (US$90,000) [38]
2001 Increase INR16.32 million (US$270,000) [39]
2002 Increase INR37.6 million (US$630,000) [40]
2003 Decrease INR16.08 million (US$270,000) [41]
2004 Increase INR41.46 million (US$690,000) [42]
2005 Decrease INR38.7 million (US$650,000) [43]
2006 Increase INR4531.47 million (US$76 million) [44]
2007 Increase INR7482.79 million (US$120 million) [45]
2008 Increase INR14385.79 million (US$240 million) [46]
2009 Increase INR18819.79 million (US$310 million) [47]
2010 Increase INR22420.91 million (US$370 million) [48]
2011 Increase INR29606.04 million (US$490 million) [49]
2012 Increase INR40191.14 million (US$670 million) [50]

References[edit]

  1. ^ SpiceJet News
  2. ^ a b "Introducing SpiceJet Max". SpiceJet. Retrieved 12 January 2013. 
  3. ^ a b "SpiceJet Contact Information | SpiceJet Airlines". Spicejet.com. Retrieved 14 September 2010. 
  4. ^ "Contact Us." SpiceJet. Retrieved 24 January 2013. "Corporate Office: SpiceJet Ltd., 319, Udyog Vihar, Phase IV, Gurgaon – 122016 Haryana, India." and "Registered Office: Murasoli Maran Towers, 73, MRC Nagar Main Road, MRC Nagar, Chennai- 600028, Tamil Nadu."
  5. ^ Nair, Vipin V. (4 July 2008). "SpiceJet Rises in Mumbai on Report of Kingfisher Deal (Update2)". Bloomberg. Retrieved 30 August 2010. 
  6. ^ "SpiceJet Cargo Services". SpiceJet. Retrieved 19 January 2012. 
  7. ^ "Company History – SpiceJet". moneycontrol.com. Retrieved 30 December 2011. 
  8. ^ "SPICEJET SELECTS BOEING". SpiceJet. Retrieved 30 December 2011. 
  9. ^ "SpiceJet gets AAI approval for parking slots in Mumbai and Delhi". SpiceJet. Retrieved 30 December 2011. 
  10. ^ "SpiceJet books 37,000 seats on day 1.". SpiceJet. Retrieved 30 December 2011. 
  11. ^ "Shri Praful Patel flags off SpiceJet.". SpiceJet. Retrieved 30 December 2011. 
  12. ^ 11 Jun 2010, 03.31 pm IST,AGENCIES (11 June 2010). "Kalanithi Maran to buy 37% stake in SpiceJet". The Economic Times. Retrieved 30 August 2010. 
  13. ^ "Kalanidhi Maran buys 37.7 p.c. stake in SpiceJet". The Hindu. 13 June 2010. Retrieved 8 August 2010. 
  14. ^ "Fund infusion critical for SpiceJet". Business Standard. Retrieved 15 February 2012. 
  15. ^ Spicejet owes Govt Rs 366 million
  16. ^ "IndiGo, SpiceJet airlines violate mandatory safety norms: DGCA". India Today. Retrieved 20 January 2012. 
  17. ^ "Standalone Result – 31-Dec-11". Bombay Stock Exchange. Retrieved 2 March 2012. 
  18. ^ "Marans to pump Rs 100 cr into SpiceJet, up stake to 48.6 pc". CNN-IBN (India). Retrieved 3 March 2012. 
  19. ^ "SpiceJet returns to profit". The Hindu. Retrieved 27 January 2013. 
  20. ^ "SpiceJet to commence international operations. Booking opens for flights to Colombo and Kathmandu.". SpiceJet. Retrieved 30 December 2011. 
  21. ^ "Hyderabad’s RGIA to be a key base for SpiceJet’s Q-400 operations". SpiceJet. Retrieved 30 December 2011. 
  22. ^ "Jet Air, SpiceJet Rise in Mumbai on Foreign Investment Plan". Bloomberg Businessweek. Retrieved 23 January 2012. 
  23. ^ "SpiceJet Big sale". SpiceJet. Retrieved 12 January 2013. 
  24. ^ "Promotional offer: SpiceJet tickets for Rs 2,013 till Jan 13". Business Today. Retrieved 12 January 2013. 
  25. ^ "SpiceJet slashes domestic airfare for limited period, other airlines may follow". IBNLive. Retrieved 12 January 2013. 
  26. ^ "SpiceJet slashes fares; server crashes on booking rush". The Hindu. Retrieved 12 January 2013. 
  27. ^ "SpiceJet rakes in Rs 160 crore through discount offer". The Economic Times. Retrieved 15 January 2013. 
  28. ^ "Star Navigation Announces Firm Orders from SpiceJet.". SpiceJet. Retrieved 27 January 2013. 
  29. ^ "Boeing, SpiceJet Finalize Order for 30 Next-Generation 737-800s". Boeing. Retrieved 8 November 2010. 
  30. ^ "Bombardier Sells 15 Q400 NextGen Aircraft to India's SpiceJet". Bombardier. Retrieved 30 December 2011. 
  31. ^ "CH-Aviation – Airline News, Fleet Lists & More". Ch-aviation.ch. Retrieved 30 August 2010. 
  32. ^ "SpiceJet – Details and Fleet History – Planespotters.net Just Aviation". Planespotters.net. Retrieved 30 August 2010. 
  33. ^ Thomas Noack. "SpiceJet's historic fleet". planestoppers.net. Retrieved 21 January 2012. 
  34. ^ "Auditors cast doubts on SpiceJet's ability to stay afloat". Bennett, Coleman & Co. Ltd. Retrieved 15 February 2012. 
  35. ^ "Boeing, SpiceJet ink $4.4 Bn deal for 737-8 Max Aircrafts [sic] at India Aviation 2014". IANS. news.biharprabha.com. Retrieved 12 March 2014. 
  36. ^ "SpiceRoute". MaXposure Media Group. Retrieved 14 January 2013. 
  37. ^ "Strong market share gains despite higher realizations, Delivers Rs. 102 crore in PAT for the quarter". Priti Dey, SpiceJet Ltd. Retrieved Chennai, 21 January 2013. 
  38. ^ "Standalone Result – 31-May-00 – BSE". Bombay Stock Exchange. Retrieved 31 December 2011. 
  39. ^ "Standalone Result – 28-Feb-01 – BSE". Bombay Stock Exchange. Retrieved 31 December 2011. 
  40. ^ "Standalone Result – 31-May-02 – BSE". Bombay Stock Exchange. Retrieved 31 December 2011. 
  41. ^ "Standalone Result – 31-May-03 – BSE". Bombay Stock Exchange. Retrieved 31 December 2011. 
  42. ^ "Standalone Result – 31-May-04 – BSE". Bombay Stock Exchange. Retrieved 31 December 2011. 
  43. ^ "Standalone Result – 31-May-05 – BSE". Bombay Stock Exchange. Retrieved 31 December 2011. 
  44. ^ "Standalone Result – 31-May-06 – BSE". Bombay Stock Exchange. Retrieved 31 December 2011. 
  45. ^ "Standalone Result – 31-Mar-07 – BSE". Bombay Stock Exchange. Retrieved 31 December 2011. 
  46. ^ "Standalone Result – 31-Mar-08 – BSE". Bombay Stock Exchange. Retrieved 31 December 2011. 
  47. ^ "Standalone Result – 31-Dec-08 – BSE". Bombay Stock Exchange. Retrieved 31 December 2011. 
  48. ^ "Standalone Result – 31-Mar-10 – BSE". Bombay Stock Exchange. Retrieved 31 December 2011. 
  49. ^ "Standalone Result – 31-Mar-11 – BSE". Bombay Stock Exchange. Retrieved 31 December 2011. 
  50. ^ "Standalone Result – 31-Mar-12 – BSE". Bombay Stock Exchange. Retrieved January 2013. 

External links[edit]