One of the biggest blows —entirely out of its control — to the airline’s plans was the unexpected grounding of 13 of its B737 Max since March 2019. The carrier will be compensated for this by Boeing, a much needed relief for SpiceJet
with cash on its books at a paltry Rs 93 crore by end September.
In the mad frenzy to grab Jet’s slots, SpiceJet
– like rivals – jumped in too. The airline took on 31 of Jet’s aircraft, all of which had a two-class configuration. However, the gambit proved costly for the carrier in more ways than one. The aircraft are ageing and appear to have been more trouble than they were worth. This led to a spike in maintenance costs in the July-September quarter. Yields played spoilsport and stayed stubbornly low, reflecting the failure to charge a premium on the business class seats on offer. The aircraft will now be reconfigured to an all-economy class, an admission of the gambit having failed. Rising costs and stubborn yields reflected in the cost per available seat kilometre for the airline that rose by 8 per cent year on year, taking it to a record high and much above many rivals. This is despite the salaries bill for the airline being amongst the lowest in the industry.
In the midst of the core business taking a beating, Singh has in October and November been busy with all kinds of new initiatives. He’s announced plans to launch an international hub operation out of Ras-Al-Khaima, 40 minutes from Dubai, where he sees “great potential”. By December, as per the original plans, four to five aircraft are to be based here to operate on six to seven-hour, medium-haul routes. The Gulf seems to be where he’s honing in since November: The airline signed a codeshare agreement with Emirates Airlines and entered into a memorandum of understanding with Gulf Air to widen their partnership as well.
Industry observers argue that Singh, with his plate already full, has been dipping his fingers in several new pies. A business-to-business cargo delivery service was launched in 2016 and is running for select corporate clients. In 2017, he surprised everyone by opening SpiceStyle stores – including one in Gurugram’s Galleria market, one of the more expensive rental spots — to sell designer and other lifestyle products. The Galleria store has since shut shop but two stores in Hyderabad and Delhi are still around. In 2018, the airline announced that it was setting up Spice Star, a training academy for youngsters interested in charting out a career in aviation. Launched in partnership with Amity University in Noida, it acts as a home grown hiring ground for the airline.
What is perhaps the most incredible aspect of the SpiceJet story is how Singh is attempting to pull off everything virtually on his own. When he took charge of the struggling airline in December 2014, the airline was down to around 32 aircraft with 5,400 total employees. Five years later, it has a fleet of 118 aircraft with over 230 on order and over 15,000 employees. He appears to have what many in the sector are terming an invisible “magic wand”, one that is giving jitters to analysts and investors who don’t see any second line of command in the airline whatsoever. Singh remains a single man army — a desi Superman — one everyone is unsure will sink or swim.