SpiceJet will review its plan to continue with its business class offering, SpiceBiz, from August as it focusses on its low-cost model. FE’s Arun Nayal spoke to SpiceJet’s CFO Kiran Koteshwar about the airline’s Q4 results and gains from Jet’s grounding.
What was the benefit from Jet Airways’ grounding during Q4FY19?
We could not get much benefit of Jet’s grounding because of our Boeing 737 Max grounding. We did not have the opportunity to increase the fares as our inventory was getting consumed by the cancelled flights.
How much did the yields increase in the quarter?
Yields were up by 11% year-on-year for Q4FY19.
Could you elaborate on the lease deals for ex-Jet planes?
The deals we have got are very exceptional because the situation was more opportunistic. It was a win-win for both lessors and us. Their aircraft were stranded in India and it would have taken them a long time to rationalise the asset. We asked them to get the aircraft airworthy and did short-term leases of 1-2 years.
How is SpiceBiz doing and would you continue with it going forward?
We are very clear that SpiceJet’s is a low-cost model. We have not launched any business class product. It was just that we had seats, which we inherited with the aircraft. We didn’t want to ground the aircraft during a peak season to reconfigure the seats. In August, when the lean season starts, we will see the results if we want to continue it or not. Our plan is to bring back (the aircraft) to 189 seats. In fact, we have started ordering seats because we don’t want to re-look and then decide to order seats as another two months will go into it.
What is airfare scenario in the current quarter?
Definitely, there will be yield growth. It happens when the capacity is taken out of the market. We have secured 30 aircraft of which we have already deployed 28 and eight are coming in the first and second week of June. These aircraft are all on prime slots of Mumbai. Earlier, we were not operating on too much on metro-to-metro routes; we were more of a tier-2 and tier-3 operator. This will homogeneously spread our yield profile.