Unperturbed by rivals having higher pie of the domestic traffic, SpiceJet today said it would not “go crazy” about market share and the focus is on remaining profitable in a responsible manner.
Scripting a turnaround with seven straight quarters of profit after being on the verge of closure in late 2015, SpiceJet is currently fourth in terms of domestic market share after IndiGo, Jet Airways and Air India.
Asserting that SpiceJet would not “go crazy” about its market share, SpiceJet Chairman and Managing Director Ajay Singh said the focus is to grow in a responsible way and remain profitable.
“Market share will happen as we increase our planes and flights,” he noted.
As per the latest data available with aviation regulator DGCA, SpiceJet is at the fourth position with a market share of 12.8 per cent, a notch below national carrier Air India which had 12.9 per cent share at the end of November 2016.
During the same period, rival IndiGo’s market share touched 42.1 per cent while that of Jet Airways stood at 14.9 per cent, excluding JetLite which had a meagre share of 2.4 per cent.
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About ongoing controversy over the On Time Performance (OTP) of domestic airlines which was triggered by rival IndiGo, Singh said he could not understand what it was all about.
Taking a dig at IndiGo, he noted that it is the same data that has been used by that airline saying they are number one for the last several years.
“Now, the same data shows that SpiceJet is number one and has been number one for the last six month. I don’t see the reason for the controversy.. It is government data and we are no quoting our data,” he said.
In November 2016, SpiceJet clocked the highest OTP of 81.7 per cent while that of IndiGo much lower at 72.4 per cent. The data, compiled by aviation regulator DGCA, is from four metro airports.
DGCA has set up a panel to review the OTP measuring mechanism for airlines following IndiGo complaining that the current system was flawed.
In a lighter vein, Singh said it would be beneficial for consumers when airlines fight over operational punctuality.
“It is great for consumers that people fighting about OTP… Let me try and beat us. We will try to beat them. Let everybody else try to beat us and we will try to beat them. The consumer will benefit from all of this,” he added.
Referring to SpiceJet’s precarious financial position before he took over the reins in January 2015, Singh claimed that the airline now makes around Rs 1 crore every day.
“We are concerned about our profitability. Since January 2015, in 680 days that the airline has been with us we have made profit of Rs 1 crore everyday. If you look at 2014, for 365 days, the company lost nearly Rs 3 crore a day,” Singh claimed.
In the 2016 July-September period, the airline had posted its highest-ever quarterly profit of Rs 59 crore. In the year -ago period, the same stood at Rs 29 crore.
To a query on whether the airline’s business model has changed since he took over the reins in 2015, Singh said that while the business model inherently remains the same, now it is “much more conscious about cost”.
Singh mentioned that Boeing extended support when the airline was facing rough weather in 2014, including by way of refunding some advances that were made towards aircraft purchases.
“Boeing played an important role in assuring lessors that SpiceJet would remain flying. They also supported us financially… In those difficult times, Boeing offered very strong support to SpiceJet and they played very incredible part in what you call turnaround or revival story,” he noted.
SpiceJet has also saved on expenses by reducing costs related to engineering and maintenance costs, and airports, among others.
Embarking on expansion plan, the airline has inked a deal worth Rs 1.5 lakh crore with Boeing for buying up to 205 new planes.