SpiceJet, Quo Vadis?
Sunday, 4th January 2015 at 01:57am
The budget carrier seems to have faltered anew since it suffered losses rather briefly in 2012 for the first time since its founding in 2005.
SpiceJet returned to profitability in early 2013 while most other local airlines suffered a beating. Its profitability seems short-lived though, when it posted a record loss of Rs.1,000 crore in May last year for fiscal year ending March 2014.
Two months later, it made a milestone when it became the second largest airline by market share in India, dislodging the erstwhile leader, Air India.
Its rough ride last year seemed unnoticed by most as it didn't show any sign of trouble.
In March 2014, the low-cost carrier showed ostentation and vitality inherent of a successful enterprise, as portrayed by its ebullient cabin crew when they performed a dance number on board a flight which went viral over social media. Though it didn't amuse DGCA officials as it resulted to the suspension of its two pilots.
Seemed like that image of vigor and high spirits concealed what was really going on that troubled the airline.
In August last year, the airline was sensing a more distressing sign when it registered an alarming first-quarter loss. Despite the surging sales and increasing market share, its operating costs and other expenses continued to depress its overall financial health.
In early November last year, a lot of angry SpiceJet passengers swarmed the country's airports either waiting for their delayed flights or hoping to get on the next flight after their original flights got canceled.
Overall, the troubled budget airline amassed over 2,000 canceled flights during the period. It was even unable to pay their employees' salaries on time for the month of December that alarmed its employees who were expecting to have a merry Christmas and definitely a happy new year.
Seemed like its ascent to number two position by market share in India's domestic passenger traffic in July last year was just a fluke. Despite that milestone, SpiceJet's shares faltered in the stock market by 8%, resulting to market capitalization loss of Rs.100 crore.
Now, seems everybody is begging for an answer to the question, "SpiceJet, where are you going from here?"
By: Pete Lee.