SpiceJet Airlines

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 jntroduction

r A low-cost airline based in New Delhi

r jt began service in May 2005.

r SpiceJet was earlier known as Royal Airways.

r SpiceJet names all its aircraft after various spices

and herbs like Cinnamon, Thyme, Oregano.
 þ



r Their marketing theme ³Offering low 'everyday spicy

fares' and great guest services to price conscious
travelers´.

r Their aim To compete with the jndian Railways

passengers travelling in air conditioned coaches.

r SPjCEJET ± flying for everyone.

 D
 



r Dow Cost Airline SpiceJet marked its entry in service

with Rs. 99 fares for the first 99 days, with 9,000
seats available at this rate.

r jt was followed it up with a Rs. 999 promotional

scheme on select routes.
 

 
 

r Current Fleet & Operations 115 daily flights with a

fleet of 19 Next Generation Boeing 737s. 14 - 737-
800s and 5 - 737-900ERs (extended range).

r 150 jndian pilots, and 50 expatriates.

r At present the fleet strength is completely utilised

and further route expansion has been ruled out till
new aircraft are inducted.




r Achievements SpiceJet was voted as the best low-

cost airline in South Asia and Central Asia region.
r By 2008, it was jndia's second-largest low-cost
airline in terms of market share.
r Market share has increased to 11.8 % in January,
2009.
r How SpiceJet achieved this?
 
 


r SpiceJet maintains a standard aircraft type with identical seat

configuration in a single cabin, engines and other maintenance
equipment.

r This commonality of aircraft spares and training for crew and

engineers brings down inventory, fleet management and employee
costs. young fleet, with an average age of 2 years

r These route-revenue optimization and cost-minimization

techniques have enabled SpiceJet to become one of jndia¶s lowest
cost airline. During April-September 2007, SpiceJet reported the
lowest cost of Rs 2.36 per ASKM (Available Seat Kilometer), vis-à-
vis Rs 3.19 reported by Deccan Aviation and Rs 4.11 by Jet Airways
 
 


r jnternationally, DCCs operate at smaller airports and at

non-peak times at main airports, offering point-to point
connectivity. This allows them to cut-down or bypass
airport and related charges, fuel charges, and hub
operation costs.

r By focusing attention on ground-handling and refueling

times, and re-jigging airline schedules, SpiceJet was able
to raise aircraft utilisation to 12.5 hours a day from 10.5
hours in 2008-09 - significantly higher than Kingfisher's
9.5 hours, Jet's 10.5 hours and Air jndia's 8.5 hours.
 Adjusting to the Global Meltdown

r When its full service counterparts like Air jndia, Jet

Airways and Kingfisher Airlines are struggling now,
SpiceJet is focusing on its profitability from this
consolidation wave.
r Focus towards enhancing the customer experience.
r The global slowdown in air travel has impacted
leisure segment, and has made SpiceJet accelerate its
increasing focus on business passengers.
  
   

r Business travelers can collect their boarding passes for a

same-day return flight.

r jntroduction of a corporate travel program that means ability

to change ticketed flight dates and times without surcharges.

r While airlines in the US are charging for each check-in piece

of baggage, SpiceJet is going the opposite way to woo
customers by extending the free "two piece baggage" concept
to international connecting passengers.

r Aircrafts cleaned every 3 days instead of once a week before.

 Focus towards enhancing the Customer
Experience

r Complimentary supervision of unaccompanied

minors.

r Hot beverage and combo meals available for sale.

Two-bag waiver for guests connecting on SpiceJet
within 24 hours of international travel.

r Waiver of additional charges on sports kits.

 Cue from jnternational Airlines

r Taking a cue from Air Asia X, SpiceJet is actively

finalizing pre-ordered snacks. This eliminates
wastage of food, saving costs as much as Rs. 1,000
($20) per meal.

r Modeled after Singapore Airline's Boarding Pass

privileges programme, SpiceJet has launched its own
programme.

r Passengers can avail special benefits from hotels on

presentation of their SpiceJet boarding pass.
 Cost Cut Measures

r Normally airlines pay professional musicians Rs. 2~5

million ($40K~$100K) to compose the music. But
SpiceJet went the in-sourcing route rather than out-
sourcing.

r SpiceJet discovered Moin ,their airport services

manager, was also a proficient musician and he
composes the music thus reducing cost.

r "Word of mouth" advertising The excellent customer

services help them not spend on advertising, instead
relying on word of mouth referrals.
 Fleet in jndia (South Asia)

r Andhra Pradesh
r Assam Delhi
r Goa Gujarat
r Jammu & Kashmir
r Karnataka
r Kerala
r Maharashtra
r Rajasthan
r Tamil Nadu
r Uttar Pradesh
r West Bengal
 Future Plans

r Between 2010 and 2012, SpiceJet will induct 12

Boeing 737-800s & 747 into its fleet, at the rate of 4
aircraft every year.

r With a capacity of 300 tonnes per day, SpiceJet has

also targeted a doubling of cargo revenue to five per
cent of total revenue

r Spice Jet - jndian but with jnternational Standards