Yvo and utiketIndonesia

SpiceJet shrinking size of fleet

20 Sep 2014 06:23:49

bdlive.co.za

NEW DELHI "” SpiceJet, the Indian budget airline that has posted four straight quarterly losses, seeks to lower costs by flying fewer and newer aircraft in a bid to return to profit amid intensifying competition from AirAsia.


The airline returned two 14-year-old aircraft to lessors three weeks ago, and will consider removing other older planes to improve fleet efficiency and cut fuel cost, chief operating officer Sanjiv Kapoor said.


SpiceJet, majority owned by billionaire Kalanithi Maran, has this year offered fares as low as $8 to fill seats that would have otherwise gone empty, boosting its own occupancy and forcing competitors to follow suit. The budget carrier is shrinking the size of its fleet and workforce to lower costs in one of the world's most expensive markets for airlines.


"It's better to be one size smaller" with more seats filled in fewer aircraft, Mr Kapoor said in New Delhi last Friday. SpiceJet has cut capacity 10% this year, and aims to shrink up to 14% in the year ending December, he said.


The steps come as SpiceJet looks to raise funds, including from the sale of stake. In March, SL Narayanan, the chief financial officer of SpiceJet's parent Sun Group, said the weak operating environment in India was unlikely to attract investors immediately.


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