Tuesday, November 16, 2010

SpiceJet’s New Management Plans To Move Fast

AWIN First Nov 15 , 2010
Neelam Mathews mathews.neelam@gmail.com

Budget airline SpiceJet’s majority shareholder in the company Kalanithi Maran, who also is chairman and promoter of Sun Network, has formally been inducted into the Board of SpiceJet as the director and chairman, effective Nov. 15.

Maran currently holds a majority 38.66% stake through his aviation firm KAL Airways that recently acquired SpiceJet.

The carrier is now in “fast forward” regarding its expansion plan that includes 30 Boeing 737s and 15 Bombardier regional Q400s that were recently ordered.

“SpiceJet has been outperforming ... and is now perfectly poised for a sharp take-off. I am very optimistic about the growth in the aviation business, which is the basis for the order of 30 new Boeing 737-800NG aircraft ... with deliveries commencing in 2014. This is in addition to our plans to double our current fleet size to 50 aircraft by 2013. I am extremely excited to lead the airline on this growth path,” Maran confirmed.

“It is our vision that domestic air-connectivity is incomplete without looking at the Tier-2 and Tier-3 cities. SpiceJet’s recent announcement of acquiring Q400 NextGen turboprop aircraft will help us in realizing this vision,” Maran added.

“It is clear now that SpiceJet will bear a definite Maran stamp of a new set of thinking and more aggressive game plan. I do not rule out an acquisition,” said Kapil Kaul, chief of Sydney-based think tank Center for Asia Pacific Aviation, India and Middle East regions.

SpiceJet was relegated to the second largest budget carrier in India—after IndiGo—with the past two years lost in looking for investors and a fragmented business plan. The carrier will now make up for the years of inaction, explains Kaul.

“Execution of a plan is critical given that the carrier is short of management (at all levels), adds Kaul.
An airline official requesting anonymity said it is likely that budget airline GoAir with 10 Airbus A320s and two more expected to join its fleet soon would be on the radar of SpiceJet for acquisition.

“Maran might be tempted to name his regional operations company after his popular [television network Sun Network] in South India,” says an analyst in Chennai.

The new regional fleet of Q400s would most likely step into the routes of the recently shut down Paramount Airways that successfully ran its all-Embraer fleet on short routes in South India.

SpiceJet has a 13% market share with 153 flights daily to 20 Indian cities. On the international front, it operates flights to Kathmandu and Colombo. Starting Nov. 30, SpiceJet will have a new generation fleet of 25 Boeing 737-800s and 737-900ERs.

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