SpiceJet - New ‘Low Cost’ Kid In The Sky

SpiceJet, the latest entrant on the low cost carrier scene commenced services on May 23. The airline has attracted a large number of passengers with its 'Red Hot Special Fares' offering tickets as low as Rs 99. The airline connects six destinations - New Delhi, Mumbai, Goa, Bangalore, Pune and Ahmedabad. The airline will initially use three Boeing 737- 800 aircraft with an all-economy, 189-seat configuration. Commenting on the launch, Mark Winders, chief executive officer, SpiceJet, said, "Our target is the train travellers who usually take 16 hours to commute to their destination. We are offering the flying option at affordable prices. Our target customer is not a Jet and Sahara passenger but cost-conscious companies, business train travellers and vacationers. There are a large number of people to be tapped out here. There is no bottom to that market." As part of its launch plans, SpiceJet will offer 9,000 seats starting at Rs 99 for the first 99 days of its operations. Seats will also be available at Rs 499 and Rs 799 taking the total number of special fare tickets to 30,000. On the fleet expansion plans, the company will lease another three to four aircraft by the end of 2005 and will acquire 10 new aircrafts in 2006 with plans to acquiring 10 more in the near future. The airline hopes to have 20-30 aircraft in the next two-three years. Investments of US$ 20 million have already been made and the company is raising another US$ 90 million through convertible bonds.