The dividing line between the operating models of full-service and low-cost airlines seem to be blurring. The country?s second largest budget carrier SpiceJet plans to operate on a hub-and-spoke model with the induction of Bombardier regional jets beginning June this year.
Most of the low-cost airlines worldwide maintain a single-type fleet and offer point-to-point connectivity. SpiceJet currently maintains a fleet of 25 B737 aircraft but is planning to induct 15 Bombardier Q400 turbojets by the end of next year.
?We are in the process of taking a decision on hub-and-spoke model. There are several routes where this could work well,? a SpiceJet official told FE. The official said that the airline would get the delivery of upto seven aircraft by the end of this year. SpiceJet had in December last year placed firm order to buy 15 Bombardier Q400 valued at about $446 million.
The airline’s CEO Neil Mills could not be contacted for comment on the development. A text message sent to him did not elicit any response.
Among the full service airlines, the largest private carrier by market share Jet Airways has already introduced all-economy flights to put a break on shift of customers from its network to budget airlines.
Low-cost airlines offer point-to-point connectivity to bring efficiency in its operation. As against this in case of full-service carriers which operate on hub and spoke and maintains bigger network there are chances of missing flights and baggages thus inconveniencing passengers.
An airline source said that SpiceJet was in discussion with the operators of Hyderabad and Bangalore airports to hub part of their operating in southern part of the country.
Some industry experts, however feel that low-cost airlines could have to go for hub and spoke in a particular region as the demand for air traffic from smaller towns and cities are growing but still not sufficient to make point-point connectivity commercially viable.
“Pure point-to-pont sometimes does not make sense. Since bulk of the traffic is still on metro routes low-cost airlines may not find it commercially viable to operate direct flights to smaller cities,” KPMG director (aerospace and defence) Amber Dubey said.
Nearly 45% of the country’s 50 million air traffic is on Delhi-Mumbai route alone. demand on small city pairs is growing fast though on lower base.
