1. Pricing strategy works for us, says SpiceJet

Pricing strategy works for us, says SpiceJet

A day after SpiceJet reported profit for the second straight quarter, its chief operating officer Sanjiv Kapoor on Thursday said "pricing stimulation" as well as dual fleet strategies are working for the airline.

By: | Chennai | Updated: July 31, 2015 7:45 AM
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SpiceJet, which was on the verge of closure late last year, has reported a net profit of Rs 72 crore in the three months ended June 2015. In the year-ago period, it had a net loss of Rs 124.1 crore. (PTI)

A day after SpiceJet reported profit for the second straight quarter, its chief operating officer Sanjiv Kapoor on Thursday said “pricing stimulation” as well as dual fleet strategies are working for the airline.

His comments come against the backdrop of concerns over the airline’s frequent discounted ticket sales and whether such an approach would be financially viable in the long run.

“Pricing stimulation that started in 2014 continues for a reason: It works! Keeping RASK (Revenue Per Available Seat Kilometre) at 2014 levels in 2015 conditions is not easy!” Kapoor tweeted.

The airline, which was on the verge of closure late last year, has reported a net profit of Rs 72 crore in the three months ended June 2015. In the year-ago period, it had a net loss of Rs 124.1 crore.

“Everything naysayers said we were doing wrong-pricing strategy, Q400s, SpiceMax working for us. Which is why we still do it. Naysayers still referring to our price stimulation as cause of past distress. They have no idea of what they are talking about no credibility”, he said.

“The credit for the Q4-15 and Q1-16 results goes to each of the 4,000 staff who kept the faith, refused to give up! They are the heroes,” Kapoor noted.

According to him, the carrier’s dual fleet strategy is working. “Costs have been brought down esp. maintenance. Smaller markets cannot accommodate larger aircraft,” he added.

“Though (Q1) results were good, a lot more upside potential. There is no over capacity. There is huge untapped potential. Only one per cent fly in India”, he said.

Amid financial turbulence, SpiceJet saw an ownership with original promoter Ajay Singh coming back to the helm.

“Clearly the results, the best ever Q1 in our history,the RASK boost since 2014 that is still sustained, mean nothing to these naysayers. If it were negative, would we still be doing it, even after ownership change? “, Kapoor tweeted.

Tags: SpiceJet
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