SINGAPORE–SpiceJet Ltd., the first Indian low-cost carrier to receive permission to fly abroad, is going slow on adding international routes and instead plans to focus on putting smaller cities on the flight map, where it sees greater growth opportunity.
To cater to the growing demand for aviation in India, SpiceJet will lease seven Boeing 737-800 planes in 2012 and another eight in 2013 as it awaits deliveries of 30 more aircraft on order starting in 2014, Chief Commercial Officer Samyukth Sridharan said in an interview on the sidelines of a low-cost airlines conference in Singapore.
"In 2012 calendar and 2013 calendar, we don't have a scheduled delivery [for Boeing aircraft]. We have locked in positions with lessors to ensure that we'll continue to grow at seven to eight planes a year," he said. The airline's fleet will rise to 32 by the end of the year from 25 at present.
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A SpiceJet aircraft prepared for takeoff in Mumbai
In July 2010, SpiceJet placed a $2.7 billion order for 30 737-800 single aisle planes from Boeing Co., which will be delivered from 2014 through 2019. The airline will receive four Boeing jets this year, completing deliveries from an earlier order for 30 planes.
SpiceJet aims to raise its fleet to 72 aircraft and operate 500 daily flights by 2013, Mr. Sridharan said.
SpiceJet, which started flights to Kathmandu and Colombo last October, is planning to add more flights to these destinations but plans to stay in India's immediate neighborhood for now. It is also looking at Dhaka and Male as possible destinations.
"We are not fussed about flying international. We see massive opportunity for growth in India," Mr. Sridharan said.
Rival IndiGo, the country's biggest budget carrier by market share, received government permission to fly overseas on Jan. 19 and is planning to start flights to Singapore, Bangkok, Dubai and Muscat starting August.
Earlier this month, IndiGo placed a $15.6 billion order for 180 A320 aircraft from Airbus, the single biggest in aviation history. Airbus says the deal is the largest-ever jet order in terms of number of planes and one of the biggest by value.
SpiceJet says it prefers to be more conservative.
"We've always said that we are not out to fly international for the sake of flying international. If you look at some of my competitors from here, look at the capacity they've pulled out," Mr. Sridharan said. Southeast Asian carriers Tiger Airways Holdings Ltd. and AirAsia Bhd have withdrawn flights to some southern Indian cities in recent months.
SpiceJet is buying smaller aircraft to start flights from smaller Indian towns where air traffic is likely to rise between 25% and 27% each year, outpacing the six metropolitan cities that are likely to continue their 11% growth, he said.
India's air traffic is expected to reach 180 million passengers by 2020, compared with an estimated 70 million in the year through March.
The company placed a $446 million order for 15 Q400 NextGen turboprop aircraft from Bombardier Inc.'s aerospace unit late last year and has options to buy another 15, which Mr. Sridharan said the company is likely to exercise.
Deliveries of the Q400s will start in June this year and all 15 will come in by June 2012. After the first five aircraft are delivered, SpiceJet has to indicate if it wants the 15 planes on which it has options, Mr. Sridharan said.
"We want some time to see it work before we exercise the options. It will give us four to five months, which is good enough for us to figure it out and its gives us the flexibility in terms of timing our future deliveries," he said.
If the options are exercised, the order value will rise to as much as $915 million, the Montreal-based transportation-equipment conglomerate said on Dec. 9.
SpiceJet, which is based in Gurgaon, near New Delhi, is recruiting 200 pilots for the new airplanes, Mr. Sridharan said.
SpiceJet on Thursday reported a 13% fall in its October-to-December quarter net profit to 944.5 million rupees, missing analysts' estimates, after it incurred a one-time charge of 235 million rupees as income tax.
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