India’s Spicejet big turnaround

Boeing 737-8. Boeing photo.

May 2, 2018, © Leeham News: Spicejet, the Indian low-cost airline, in its 2016-2017 Annual Report (to March 31) didn’t mince words or try to parse over its troubled history:

“Back after near shutdown. Restoring confidence. Organisational restructuring. Rising crude prices.Stiff competition. Legacy issues. We were determined to transform.”

These words are on the first page of the Annual Report.

Name another airline that is so up-front, open and candid about its past turmoil.

More candor

Spicejet didn’t stop there.

“From dwindling reputation to India’s most preferred airline. From running on losses to clearing-off existing debts, generating excess cash flows, and regaining customer and consumer confidence. From inability to control costs to lowest-in-the-industry cost model. From unpredictable operations to industry defining operational parameters and customer satisfaction levels. From lacklustre stock performance to highest in the airline industry returns in the world. From investors shying away to investors bullish on us.”

Click on mage to enlarge.

From there, it’s Annual Report reverts to the traditional self-promotion, but Spicejet can’t be blamed for tooting its own horn.

For years, Spicejet was on LNC’s Storm Warning Flag list as a carrier to watch because of huge losses and over-ordering airplanes.

In just two years, the airline turned around from near-extinction to a profitable carrier to become India’s third largest domestic carrier, after Indigo and Jet Airways and slightly ahead of Air India’s domestic share.

Spicejet is a solid Boeing customer, with 142 737s on order. Jet Airways last month announced an order for 75 737s, enabling it to surpass Spicejet’s backlog with 202 737s and 10 787s. Indigo remains the market leader for backlog, with 398 Airbus A320s on order.

Spicejet’s route map at October 2017. Click on image to enlarge.

For regional routes, it uses the Bombardier Q400. An order for 25+25 placed last year at the Paris Air Show breathed new life into the struggling program.

The 12-year old airline serves more than 50 cities.

12 Comments on “India’s Spicejet big turnaround

  1. This article got me thinking. Wouldn’t “Spicejet” be a more appropriate name for an Indonesian airline? And, in turn, “Lion Air”, could be the name of an Indian air carrier, as there is at least a small population of lions in India.

    • Youse buys your curry and youse takes your chances.

    • India is also know for its spices. The name therefore is appropriate.

  2. OT Amazing, kudos SW (and maybe Boeing AOG?). SW’s already flown the damaged, blown engine 737 back to Everett this past Monday from Philly! 5hrs, 5 minutes @ 40,000’ cruise altitude. Yep, a QEC engine change, and some duct tape, and she was near good as new for a transcontinental, and rock and rollin’! LOL

  3. From Reuters “India’s IndiGo says its president Ghosh resigning, to name new CEO … Neither the airline nor Ghosh cited a reason for his departure, but the statement quoted Ghosh saying he would embark on his “next adventure” some time in the near future. It did not elaborate.” Seems like something is shaking at this big Airbus customer …

    • @David Kramf

      It looks as if IndiGo has been looking for seasoned veterans to steer the course of the airline’s expansion into Europe and beyond.

      Aditya Ghosh’s recent resignation is a rare top level exit at IndiGo, India’s top carrier by market share, which has held on to most of its key men since inception in an industry that sees frequent churns at the helm.

      Nevertheless, too many people close to the company are talking about a subtle shift in power in the boardroom, as new appointees — mostly expatriates — work sideby-side with the old guard, often making key decisions in the company.

      They are people mostly hand-picked by maverick co-founder Rakesh Gangwal, as is evident from their background with his previous employers. And they are the ones expected to play a key role as IndiGo steers into its next phase of expansion, primarily into the big, wide international skies of Europe and perhaps beyond. ET takes a look at the new men and woman at IndiGo.

  4. Their operating costs are increasing faster than revenue, the increase in profit is due to lower financial cost that might be an effect of rebalancing the loans to longer term debt. Still impressing results,

  5. I cringe to fly on Spice Jet. They’re the only indian airline with seperate baggage check-in & charge, shortest seat pitch and staffed by mostly Indian pilots and engineers. Plus good olé 737’s are notorious for running/skidding/sliding off runways-taxi-ways with many incidents over the past 3 years pointing to faulty frontal area of the 707 derived plane. Hope the max is better sorted by bill and bob wearing denim shorts & Nike’s, bandanas while at work at everett…. Say, why do airbus folks dress up like they’re supposed to while in Alabama/Europe and bill and bob dress up like they’re at home? Another lovely topic for Leeham site me thinks. Whenever I watch any video of Boeing/Everett employees it always strikes me!

    • Well that is a whole new theory on why aircraft skid off runways!

      In all the years I have been reading about aerodynamic (though this is really Bjorn’s area) I have never head of them optimizing the front for anything other than sustained flight efficiency.

      I eagerly await (with baited breath even) being schooled in a whole new area of aircraft design I had not idea existed.

  6. And interesting news on AK and how they now want the so undesirable -9

    Clearly it nor the 900 were never a competitor for the A321, but also clearly, its got a spot in the lineup.

    If you look at it as a variant of the 737 and not an A321 competitor, its sold decently. Not ball park, but decently.

    Boeing trying to claim it was an A321 competitor aside (PR BS) not too bad.

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