Billionaire Maran’s SpiceJet Scraps 40 Indian FlightsAnurag Kotoky
SpiceJet Ltd., the Indian airline that’s posted five straight quarterly losses, is temporarily canceling 40 flights a day in a step the indebted carrier said is part of a fleet reorganization.
The cancellations will last about 10 days, Chief Operating Officer Sanjiv Kapoor said in an e-mail. The “pre-planned” move is part of a fleet “restructuring,” with passengers notified in advance and offered alternative travel, he said.
SpiceJet, majority owned by billionaire Kalanithi Maran, is shrinking its fleet and workforce and seeking investment in one of the world’s most expensive markets for airlines. The carrier has offered fares as low as $8 to fill seats amid intensifying competition from companies such as AirAsia India Pvt.
SpiceJet shares erased gains of as much as 3.9 percent and were little changed at 13.97 rupees as of 11:36 a.m. in Mumbai. They’ve slumped 20 percent in 2014, compared with a 32 percent gain in the S&P BSE Sensex index.
The airline is now operating 26 Boeing Co. 737 jets, down from a fleet of 35 earlier this year, Kapoor told reporters two days ago. The budget carrier wants to go back to flying 35 planes by December and as many as 50 jets by the second half of next year, Kapoor said.
SpiceJet narrowed losses by 45 percent to 3.1 billion rupees ($50 million) for the three months ended Sept. 30 from a year earlier, as cheaper fares lured passengers. There remains potential to boost revenue and cut costs, the company has said.