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SpiceJet eyeing cargo biz, readying own infrastructure

SpiceJet eyeing cargo biz, readying own infrastructure
PTI
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First Published: Mon, Mar 03 2008. 04 23 PM IST
Updated: Mon, Mar 03 2008. 04 23 PM IST
New Delhi: As part of its diversification plans, low-cost airline SpiceJet is aggressively looking at cargo business and has already started putting in place the necessary infrastructure.
“We are aggressively going behind cargo business. For that we are developing our own infrastructure at various ports, our own x-ray machines and other set up,” said Siddhanta Sharma, executive chairman, SpiceJet.
He said SpiceJet has already won the bid for India Post courier contracts along with Jet Airways. The airline has been carrying courier for some time and now wants to augment its revenue from the cargo segment.
“Our aircraft can carry about two tonnes of cargo and we are operating about 120 flights per day, which means we can carry 240 tonnes every day. We are doing 60-70 tonne of courier every day, so we can carry about 180 tonnes more,” Sharma said.
For the next fiscal itself, the airline has set a target of three per cent of the total revenues to come from cargo business. However, Sharma ruled out having dedicated cargo planes at the moment.
The airline is also looking at setting up hanger facility for its own use with an investment of about Rs15 crore. It is hopeful of getting land on lease for the purpose in Delhi to start with.
It has a fleet of 18 aircraft with an average age of about 1.5 years.
Even as the airline plans diversification, it is looking to earn full-year profits from the coming fiscal. It made profits in two of the last three quarters.
Spicejet is also looking to fly abroad in the next three years with possible flights to China, Gulf and SAARC countries.
“If the government relaxes the present rules, then we would fly even earlier. Otherwise, we plan to fly overseas by the middle of 2010,” Sharma said.
As per the existing rules, a start-up airline has to complete five years of domestic operations to be eligible to fly abroad.
The airline is primarily looking to fly to those destinations that attract a lot of migrant population from India, such as the Middle East and the SAARC countries besides China, he added.
SpiceJet plans to put in place a fleet of 10 aircraft for global flights initially.
“We will initially deploy 10 aircraft that will take care of our operations till 2013. Expansions would happen later depending on the projections we make,” he said. It has already placed orders for the 10 airplanes.
It can be up to 50% cheaper to fly to a foreign destination with a low-cost airline, Sharma said.
Before flying abroad, SpiceJet plans to be a 30-aircraft domestic airline, expanding its existing fleet of 18 aircraft at the rate of four airplanes per year.
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First Published: Mon, Mar 03 2008. 04 23 PM IST
More Topics: Spicejet | Cargo | Infrastructure | Revenues | Planes |