We are not worried about AirAsia: SpiceJet CEO

Mumbai March 17, 2013 Last Updated at 17:24 IST
 

AirAsia plans to launch India operations from later this year from Chennai base using 3-4 airbus A320 planes

SpiceJet is not worried about AirAsia's foray into India and is planning to expand its Bombardier Q-400 fleet , airline's chief executive officer Neil Mills said on Sunday. AirAsia plans to launch India operations from later this year from Chennai base using 3-4 airbus A320 planes. AirAsia's launch of service will bring it into head on competition with SpiceJet which commands 30% seat capacity from Chennai market. "This is not Malaysia. AirAsia has been aggressive in its historic markets like Malaysia and Indonesia but in Japan and Phillippines it has not grown much. The airline management will be logical (about pricing in India) and they have to answer to their shareholders. Moreover airlines in India are not allowed to charge a fee for baggage or preferential seats. The Aircraft Rules of 1937 do not allow it." Mills said referring to AirAsia's reliance on ancillary revenue. "We run a relatively low cost efficient operations. We have a strong balance sheet and we will be able to face competition. The biggest impact will be on those airlines with weak balance sheets and high debts,'' he said. "It is not an easy environment to operate and grow,'' he said referring to high cost of operations in India. SpiceJet has a mix fleet of turbo prop Bombardier Q-400s and Boeing 737s. In the third quarter FY 2013 it reported Rs 102 crore profit. "We have 15 Q-400 planes and we may add five more Q-400s this year. We are evaluating the plan. These could be either on lease or purchase," he said, "There is not enough supply on tier II-III routes and there is high demand. We have achieved break even on these routes,'' he added. The airline is also planning to expand its international routes and at present is exploring routes in Gulf and CIS countries. "Price of fuel continues to remain high and it will be brave to make a demand growth forecast. We were expecting some relief in taxes on aviation turbine fuel in the budget and are disappointed that has not come through. Irrational pricing is on and with two main players offering discount fares for travel in June. Why would you do that when demand for travel in June is usually good. We too will have too match the fare levels," he said.