Spicejet has announced that they have overtaken Jet Airways to become India’s second largest airlines company. This is the first time in India aviation history that Spicejet has climbed to #2 spot, and for the first time Jet Airways (and Jet Lite) have descended to #3 rank.
In a press release, Sanjiv Kapoor, Chief Operating Officer (COO), SpiceJet said, “Our increase in loads and share is the result of our new network, improved branding and product, and most importantly, our dynamic pricing and revenue management approach where we believe flying empty seats, which is the ultimate perishable commodity, is a waste especially for budget airlines,”
As per the press release (DGCA has not yet confirmed this upswing in market share), SpiceJet now commands 20.9% market share, compared to 19.6% of Jet (Jet Airways and JetLite); meanwhile Indigo with a market share of 30.7% is still retaining #1 position in the Indian market (all figures are for month of July)
Although the gap in market share of both Jet and SpiceJet is less, the change of ranking among all existing airlines companies is a big news – Considering that Jet Airways is India’s oldest private airlines and operating in India since last 21 years; compared to SpiceJet which was introduced as a low-cost airlines and operating since last 9 years (if we ignore the now defunct ModiLuft Airlines and Royal Airlines which were a failure)
If we compare the infrastructure of both the airlines, then on one hand Jet Airways operates 3000 daily flights from 76 destinations all over the world; SpiceJet is operating only 350 daily flights from 48 Indian and 10 International destinations.
But a strong branding campaign, along with superior customer care service and sticking on with low-cost airlines mode of operation has helped SpiceJet to increase it’s market share exponentially since last few years. For instance, last year, SpiceJet announced their occupancy levels of 81.4%, which was the highest among all airlines. In March this year, they had a market share of 17.8%, which has now crossed 20% and helped them beat Jet Airways.
However, revenues of SpiceJet, like all existing airlines companies is not increasing despite excellent services and increased market share. For the period April-June, 2014, SpiceJet reported loss of Rs 124.10 crore, which is their 4th straight quarterly loss. Revenues for this period also dipped to Rs 1678.59 crore.
With the entry of low cost airlines Air Asia and Tata Vistara into the Indian airspace, the competition is all set to become even more intense. With the festival season approaching fast, consumers can expect some big time discounts and flash sales from airlines companies to lure them into their seats.