News
SpiceJet terminates wet leases and holds back on new orders
May 6th 2016
Indian LCC, SpiceJet, which is the country’s fourth largest airline by passengers carried, has announced it will change the leasing terms of seven short-haul aircraft from wet to dry leases from June 15 to cut costs and improve its on-time performance, the carrier’s chairman, Ajay Singh, told The Hindu. Read More »
The Gurgaon-headquartered budget airline also said it would increase its total available seat count by 20%-25% by placing a “significant” single-aisle order this year. Singh has said he was talking to Airbus and Boeing in this context. SpiceJet has a fleet of 26 B737NGs, two A320 Family jets and 15 Bombardier Q400s.
The carrier has achieved an impressive turnaround under Singh’s leadership. After being near bankrupt in December 2014, in six months the airline transformed its fortunes by curtailing its network and fleet and introducing a new management team.
SpiceJet opposes abolition of the 5/20 rule, which dictates that carriers in India must operate a minimum of 20 aircraft for at least five years domestically before they can apply for international route permits. SpiceJet argues that retiring the 5/20 rule would give relatively new market entrants, Vistara and AirAsia India, advantages it did not have when it started in 2005. Jet Airways, IndiGo Airlines and GoAir also oppose either relaxation or removal of the rule.
The longer established carriers are looking to defend their positions, but there is more at play here than those airlines’ self-interest. India is forecast to become the largest aviation market by 2030 and its carriers are expected to place significant aircraft orders in the coming years. Until now, only IndiGo has clearly taken note of these growth projections. Launched in 2006, it has placed orders for 530 A320s.
