SpiceJet shelves Gulf plan, to expand domestic ops

Written by Nirbhay Kumar | New Delhi | Updated: Feb 1 2011, 03:57am hrs
Low-cost carrier SpiceJet has decided not to operate flights to the lucrative Gulf routes for now. The carrier would instead expand its domestic network and strengthen presence in the Saarc (South Asian Association for Regional Co-operation) region with increase in flights to cities like Kathmandu, Colombo and Dhaka.

West Asia could be the lucrative route but we are not going to put flights on these routes between now and the end of the next year (financial), the airline CEO Neil Mills told FE.

The airlines closest rival IndiGo, however, has aggressive plans to expand on India-West Asia route with daily flights to the region from several cities in India. The airline has already received regulatory approval for the operations and is expected to introduce its maiden international flights from August this year.

As per an estimate, nearly 40% of the countrys seven million international traffic is on the West Asia routes.

There is significant traffic volume on India-Gulf routes. While yield (revenue per passenger per kilometre) on this sector may not be very high but it is still good. There is enough scope of capacity addition. Given about 10% growth on the route and 5.5 million working Indians in the Gulf region, more domestic carriers can start their services, Amadeus India managing director Ankur Bhatia said.

SpiceJet started its international operation in October last year following completion of mandatory five years of service in the domestic market. It operates daily flights to Kathmandu and Colombo. SpiceJet currently operates with 25 Boeing-737 aircraft and connects 20 cities in the country with 169 daily flights. It commands 13% share in the domestic market. We have already said that domestic market is our focus. Thats the reason we placed order for Bombardier Q400, Mills said.

As per Directorate General of Civil Aviation (DGCA), the scheduled domestic carriers flew 52 million passengers in 2010 registering an increase of 18.7% over the previous year. Centre for Asia Pacific Aviation (India), a global advisory firm, has estimated that the domestic traffic would grow in the range of 10-15% in the medium term.