He added that the current market share is at 10.5%. SpiceJet is not looking at any acquisition or dilution for now, he stated. Excerpts from CNBC-TV18’s exclusive interview with Siddhanta Sharma: Q: Are we looking at a price increase? We have seen an increase of about Rs 300 per ticket from December 2? A: In this quarter, where the demand peaks up tremendously, the prices and the yields have firmed. This is not to say that we have given away our cheap fares, which were introductory fares. We did do some promotions right from September- October.
But the yields have gone up. We are looking at an improvement of almost Rs 300-350, as compared to the previous quarter. So, we currently stand at about Rs 3,100. Q: Are we looking at another increase in the New Year?
A: I do not think so. If the fuel prices do come down, we would probably reduce the fuel surcharge. Also, after January 15 till the end of March, the demands ebbs down, especially business travel, because of the less number of holidays, the leisure travel goes down. So, I don’t think the prices would be going up. Q: What are your capex plans? What do you hope your fleet size to be over the next couple of years? How do you propose to go about funding the same? A: All the aircrafts, which will be coming till 2011, would again be on lease. Based on our performance, we would be able to get a finer price. So, that is all done. In addition to that, the regular capex, which is airport-related will continue. That is to the tune of about Rs 25 crore a year. I do not think we will require fresh funding for that. Q: Give us an idea of the consolidation that we are seeing in the industry. Do you think as a result of that ticket prices and subsequently yields are going to go up? If yes, by how much over the next three-six months?
A: There were two players in the market, who were offering very cheap tickets, they were far below the cost and that situation has improved over the acquisition. So we would certainly see some improvements in the yields. What Spicejet is very careful about that is given our costs, which are the lowest in the industry we feel that we will be the first one to get benefit out of this consolidation or price increase. But as far as we are concerned the idea at the moment is to continue as a undiluted pure low-cost carrier.
Q: What would be your load factors currently? What do you think it would look like once this entire season is over? Could you put a number to what your fleet size would be said at the end of 2010? A: Our load factors in this quarter would be in the region of 80%. In December, on certain days, we have experienced 91-92% on the network. But that is due to some very high-holiday travel. So, it is roughly 80% there.
As far as fleet size is concerned, by March 2011, we should be 31 aircrafts. By the end of 2010, that should be about 29. Our market share is 10.5% with only 15 aircrafts, whereas some of the other players with double the size are only a couple of percentage points ahead of us. So, there are pretty good load factors there and good team working.
Q: Give us an idea of whether improving yields and higher ticket prices bring breakeven closer and when? A: In this quarter, we are very sure of achieving a breakeven and declaring some operating profit, not considering sale and lease- back or any other extra items. It will be in operating PAT. For the year, we would be close to a breakeven, with maybe USD 5-10 million loss here or there. Primarily, that has come about because every month the fuel prices have gone up. We are not able to collect enhanced fuel surcharge, from almost 30-35% of our customers, who book in advance.
So, that has sort of taken its toll. But, otherwise, even for this year, we would have been breakeven and next year, we are looking at a breakeven or a plus.
Q: What is your own view about the merger on Deccan and Kingfisher? The fact that Jet and JetLite are one player, Air India and Indian are one player and now Kingfisher and Deccan are merging. From an industry observer perspective, how do you see this impact in the market, going forward? A: In my opinion, it has done good for the aviation industry. Some of the weaker players have been acquired by their stronger counterparts, who have a financial muscle and believe in financial discipline in the market. They are the players, who are generally answerable to their shareholders. They would make sure that prices do not fall beyond the cost of producing a seat. In that sense, it will definitely benefit the industry. Q: Does that leave room for players such as yourself and other small carriers, that have not been a target of any merger acquisition right now, to come together in anyway of consolidation to pretty much increase your market share from hereon? A: I have been maintaining that given our very pure low-cost model, any acquisition, whether we get acquired or acquire, would mean dilution. Therefore, in the interest of SpiceJet shareholders, I have maintained so far that it is better to stand-alone, but who knows about the future. |
SpiceJet may hike prices by Rs 500-1,000 from January 1,2008. Speaking to CNBC-TV18,
|
|
|
| View Comments | Post Comments |
| Headlines from Web18 |
Connect.in.com :- Indian Businesspeople | Indian CEOs | American Businesspeople | Insurance Companies | American Chief Executives | Australian Businesspeople | Mutual Funds | Brands | Businesspeople In Software | Online trading sites | Businesspeople In Steel | California Businesspeople | American Billionaires | CNBC-TV18 Anchors | Companies listed on the New York Stock Exchange | Businesspeople Of Indian Descent | Companies that have filed for Chapter 11 bankruptcy | Google Employees | Companies listed in India | Indian Economists | Indian Journalists | Indian Billionaires | Indian Mass Media Owners | Indian TV channels | Indian financial analysts | Multinational Companies in India | Tamil Businesspeople | Time Magazine Persons Of The Year | Stock Traders
Explore Moneycontrol
| NEWS |
| Business News |
| Management Interviews (transcripts) |
| Economic News |
| BSE&NSE Notices |
| CNBC-TV18 Transcripts |
| EARNINGS |
| Pre Result Estimates |
| Results |
| Boardroom (transcripts) |
| Result Analysis (transcripts) |
| Brokerage Reports |
|
Connect.in.com
URBANEYE