economical

economical

flight for all

economical

flight for all

one of the best low cost carrier.

SpiceJet in brief

Then thats exactly what the company has been trying

to do since its incorporation
SpiceJet is an Indian low cost airline based in Delhi
which is owned by the Sun Group of India. It is the
country's second largest airline by domestic
passenger share.
SpiceJet was a domestic airlines before. But now the
airline operates more than 350 daily flights to more
than 55 destinations, including 8 international cities

History of SpiceJet
The origins of SpiceJet trace back to February 1993 when ModiLuft, one of Indias first postderegulation airlines was launched by the Indian industrialist S K Modi in technical partnership with
the German air carrier Lufthansa.
The airline started its operation within three months of its incorporation which is a record of its kind.
Airline was able to maintain high standards in flight safety, ground maintenance and on-time
performance with a strong support from its partner Lufthansa.
ModiLuft was the only airline to achieve an average aircraft utilisation of a minimum 12 hours per
day in Indian Skies.

 ModiLuft did not last long specially because of the business parity of the Germans
and Indian partners was not the same and problems arose

Then the cooperation came to end and ModiLuft acquired Boeing 737-400 aircraft
to replace the 737-200s from Air U K, however the future of ModiLuft was
already sealed and airline called off its operations in 1996.

 However, the air-operating certificate (AOC) of ModiLuft did not

lapse and the airline due to lack of funds changed hands and renamed
Royal Airways. In 2004, management of the airline was taken over
by Ajay Singh, who named the company, raised funds and re-started
operations. Thus, SpiceJet was born under the low cost model.
Indian media baron Kalanidhi Maran(chairman and managing
director of Sun Group) acquired 37.7% in SpiceJet in June 2010.
After completing 5 years of flying, SpiceJet was allowed to
commence international flights by the Airports Authority of India.

Mission and Vision

SpiceJets mission is to become Indias preferred low-cost airline, delivering the
lowest air fares with the highest consumer value, to price sensitive consumers. We
hope to fulfill everyones dream of flying!
With India's economic and business growth, the percentage of traveling population
is burgeoning. More and more Indians are traveling for both business and pleasure
and everyone needs to save both time and money.
SpiceJet's vision is to address that and ensure that flying is for everyone.

Something unique about SpiceJet

SpiceJets unique feature is its pricing strategies. When it started its operations in India it
came up with a pricing strategy of Rs.99 for the first 99 days with 9000 seats available at
this rate.
Every 99th Online ticket free
Spicy Fares Innovative pricing: Rs 2013
SpiceJet brings out 12 to 13 pricing plans every year to maintain itself as the leading
company in the LCC segment. So they are mainly trying to target the price conscious
customers through low fares and good services.

MARKET SHARE
120

100

6.1

4.3

8.1

8.6

17.7

18.2

20.2

20.4

20.4

17.8

27.4

30.3

FY 2013

FY 2014

80

60

40

20

0
Jet Lite

Go Air

Jet Airways

Air India

SpiceJet

Indigo

Source: Annual report of SpiceJet 2013-2014

But this budget airline is slowly gaining momentum and trying to increase its market share though their low
pricing strategies. SpiceJet which actually has the next generation flight Boeing 737 has planned to buy 40
more to meet its growing demands.

Their aim is to compete with the Indian Railways passengers

travelling in air-conditioned coaches.

Passenger Carried

Passengers carried
The number of passengers that

13537

SpiceJet has carried we can see a

12745

growth of 6.2% when compared to

the preceding year. Also the

10893

8608

passengers they carry are seemed to

increase over the years. Thus they
have attracted customers through
their pricing strategies and also
through their advertising.

FY 11

FY 12

FY 13

FY 14

FLIGHTS OPERATED
121788
109267

81139

53963

FY 11

FY 12

FY 13

FY 14

The flights operated by SpiceJet has also increased as there was a new Beoing 737 introduced. With
the new flight they were able to increase the number of flights operated by 11.5% than the
preceding year.

OPERATING REVENUE (INR millions)

NET PROFIT(INR million)

1,012

70000
63,042

60000

FY 11

FY 12

56,007

50000
40000

FY 13

FY 14

-1,911

39,443
-6,058

30000

28,770
20000
10000
0

-10,032

FY 11

FY 12

FY 13

FY 14

Even though the revenue of the company is seemed to rise by 12.6%, the company is making
losses consequently for the last three years. The reasons for making the highest losses this year
is mainly due to the continued weakness in the Indian Rupee value and also there was a steady
rise in the fuel prices. The fuel prices in India are usually higher by 30 to 40% when compared
with the international markets. And also the rupee value decreased by 12% in the financial year
2013-2014.

SWOT ANALYSIS
STRENGTH
Entered with Rs. 99 fares for first 99
days.
Offering low everyday spicy fares
Fleet of 6 Boeing 737-800 with 189
Seats
Low maintenance cost- single fleet
advantages.
Good presence in the market due to its
branding and advertising

OPPORTUNITY
Future Fleet Expansion will increase
its Market Share.
Attractive fares and up to date
Quality service will generate a huge
customer base comprising frequent
flyers.
Tax holiday on aircraft leasing The
Union Budget of the Government of
India announced a 5year tax
holiday on aircraft leasing.
Growing aviation market (5% in
2013-14)

WEAKNESS
A fixed-cost perishable product.
Limited sectors (Concentrated
at only North-West-South
Indian Sector)
Small Load Efficiency compared
to Air Deccan
Dependency on leased assets

THREAT
Rising fuel prices
High Attrition Rate
Killer competition The Indian
skies are witnessing a bloody
battle for market share.
A much anticipated fare war
has broken out across Indian