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Festive traffic boom in sight, SpiceJet adds to its aircraft fleet

business Updated: Aug 22, 2016 10:22 IST
Tushar Srivastava

Keeping the passenger traffic boom in smaller cities in mind, SpiceJet is adding to its aircraft fleet.(HT Archive)

The upcoming festive season and booming passenger traffic in smaller towns; these are the two targets for SpiceJet as it adds four brand new Bombardier turboprop aircraft to its fleet.

With a fleet of 14 Bombardier Q400 planes, which can seat 78 passengers, Gurgaon-based SpiceJet is already one of the biggest operators of small jets in the country. It also operates the bigger Boeing 737s.

With the additions to its fleet, India’s second largest budget carrier in terms of market share will take advantage of the booming passenger traffic in the country’s smaller towns and cities as the government prepares to roll out its ambitious regional connectivity scheme (RCS).

Sources said the new planes will join the airline’s fleet beginning October to take advantage of the peak festive season traffic. “We are the largest regional player in the market and will launch flights to new destinations like Aizawl and Silchar. We will also launch additional flights to Dhaka,” said a SpiceJet official, who did not wish to be named.

SpiceJet’s Q400 operations turned profitable for the first time last year. “The Q400s are no longer operating on a standalone model for SpiceJet, but in sync with its Boeing flights that have brought in big benefits,” said aviation expert Rajji Rai.

RCS will further boost operations to smaller towns with the government offering incentives to airlines in the form of a viability gap funding (VGF). “Under the Route Dispersal Guidelines airlines had no option but to fly to remote areas, which are often unprofitable. However, that would change under RCS, which would ensure that operational costs are covered with VGF support from the government,” said Rai. Air India has also announced that it would add 10 ATRs to its fleet by next March.

RCS specifies a fare cap of Rs 1770-Rs 4070 for flight durations between 200km to 800 km respectively. The government has suggested a VGF of up to Rs 4170 per seat for fixed wing planes and Rs 7200 for helicopters. Both the existing big carriers as well as charter operators, who can apply for a Scheduled Commuter Airlines license, will be eligible to operate flights under the scheme.

Under RCS that was unveiled in July, government plans to extend air connectivity to smaller towns and cities. There are a total of 394 un-served airports and 16 under-served airports in the country, which would be upgraded by AAI. The aviation ministry has already sought a budgetary provision of Rs 4,650 crore to revive 50 un-served and under-served airports.