SpiceJet’s profit mantra: High aircraft speed, new contracts
From increasing cruise speed to renegotiating costly maintenance and engineering contracts, it has taken the Ajay Singh-promoted SpiceJet some smart strategising to turnaround its loss-making fleet of Q400 small jets into a profitable one.business Updated: Jul 02, 2015 10:10 IST
From increasing cruise speed to renegotiating costly maintenance and engineering contracts, it has taken the Ajay Singh-promoted SpiceJet some smart strategising to turnaround its loss-making fleet of Q400 small jets into a profitable one.
The Q400 planes, ordered under previous promoter Kalanithi Maran, had been loss-making ones for SpiceJet, and Singh had initially even considered doing away with the Bombardiers.
But that was then. The Q400s, for the first time in four years. delivered a profit in the January-March quarter.
To start with, the airline changed the cruise speed of the aircraft from “intermediate” to “high speed”. “This resulted in saving of 7-8 minutes of flying time per flight, which adds up to around six extra hours of flying a day, or one new sector. It also resulted in saving 150 kg of fuel per flight,” an official said.
“It’s like an Audi being driven at an Ambassador’s speed,” Singh told HT. “We increased the cruise speed because the Q400 is capable of flying at far higher speeds. By doing so, we have managed to add extra sectors by flying the same number of hours, which has significantly increased our revenues,” he said.
“Excellent strategy. Shows smart thinking,” aviation expert Subhash Goyal said.
SpiceJet has also replaced low-yield Boeing sectors such as Varanasi-Delhi with Q400s. “Also, the Q400s are no longer operating on a standalone model but in sync with our Boeing flights and feeding traffic on those routes,” another official added.