Home >Companies >News >Market turbulence will last two quarters: SpiceJet

New Delhi: The current turbulence in India’s aviation sector, which has seen passenger demand decline in recent months, is unlikely to fade away for at least the next two quarters, said a top executive of SpiceJet Ltd, India’s second-largest private airline.

Although other airlines have quickly filled in the capacity void left by the collapse of Jet Airways (India) Ltd earlier this year, they were forced to offer low fares on new routes, affecting their yields, said Ajay Singh, chairman and managing director, SpiceJet. In aviation, yield is the average fare per passenger per kilometre, or mile.

He added that the dismal situation in the aviation market is temporary, but “the long-term growth (potential) remains pretty strong".

SpiceJet’s loss widened to 461.22 crore in the September quarter. Its competitor IndiGo too recorded a quarterly loss of 1,062 crore for the same period.

Interestingly, domestic air passenger traffic witnessed a slight uptick in the festival month of October after four straight months of decline. This has raised hopes of a turnaround in consumer demand.

While a number of new airports are being built, a large chunk of India’s population is not yet used to air travel, which means passenger growth potential is immense, Singh said.

On Wednesday, SpiceJet signed a memorandum of understanding (MoU) with Bahrain’s flag carrier Gulf Air to explore greater cooperation between the two airlines.

According to the MoU, both airlines will explore interline and codeshare agreement, coordinate cargo and engineering services, besides pilot training.

It will take at least three to five months for the arrangements between the airlines to be completed, said Gulf Air’s chief executive officer Kresimir Kucko. “We are just looking for different levels of commercial partnerships with SpiceJet and, hopefully someday, we will engage in joint ventures," Kucko added.

Currently, SpiceJet has a codeshare agreement with Emirates.

SpiceJet’s Singh also said that his airline will soon start services to Ras Al Khaimah, the northernmost emirate of the United Arab Emirates. SpiceJet will soon apply for an air operators’ permit (AOP) with the local civil aviation authorities to start commercial services in the region, he added. “Of course, we will need a local partner to start an airline at Ras Al Khaimah."

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