SpiceJet cuts capacity from July
25 Jun 2008
Mumbai: Unable to sustain the current level of operations under the impact of rising international oil prices and falling revenues, low cost carrier SpiceJet has decided to reduce the number of flights, starting July.
Speaking to the media, SpiceJet CEO, Sidhant Sharma, said the airline would reduce its total take offs and landings from the current 117 to 97, cutting out 20 flights from the airlines schedule.
Amongst the route its plans to cut back on are Ahmedabad-Jaipur and Hyderabad-Ahmedabad. Additionally, it will reduce frequencies on its Bangalore-Hyderabad, Hyderabad-Chennai and Bangalore-Chennai routes, Sharma said.
Aviation Turbine Fuel (ATF) or jet fuel has doubled in costs over the past year, and has bled the balance-sheets of almost all airlines into the red. Now, as immediate measures of cost control, airlines are not left with too many options, except trimming frequencies and cutting back on routes that have low load factors, with the overall view to cut capacities to more rational levels.
Sharma said that the reduction in flights would allow SpiceJet to improve its load-factor by three per cent, and enhance revenues by five per cent.
Presently, SpiceJet flies with a load factor of around 71 per cent, and is estimated to be set to post losses around Rs100 crore during this financial year.
