Any experiences on Spicejet? Do they have an FF program?

According to the Economic Times of India, no-frills airline SpiceJet on claimed to have registered 100 per cent load factor on Monday (Apr 17) and an average high of between 95 and 99 per cent this month.

Claiming to be enjoying the highest load factor between December and February, the airline said in a release that it had recorded 100 per cent load factor on 11 sectors and maintained 95 and 99 per cent load factor on 17 other sectors in the past few weeks.

It said it maintained 100 per cent on sectors like Ahmedabad-Delhi, Bangalore-Ahmedabad, Mumbai-Delhi, Hyderabad- Delhi, Jammu-Delhi, Pune-Delhi and Chennai-Bangalore.

According to official figures, other carriers registered load factors between 48 and 76 per cent during the December- February period.

Low-cost airlines Kingfisher recorded 48, 66 and 67 per cent on these three months, while Air Deccan registered 74.5, 74 and 71.4. SpiceJet, on the other hand, achieved 84, 88 and 89.9 per cent load factor during the period.
The mainline carrier Jet Airways registered 72.1, 74 and 76 per cent, while Indian recorded 66, 65 and 67 per cent, the figures showed.

Wow, That's amazing. I've never heard of a 100% load factor on any airline. SWA can't even do it.

I'm sure if you have a reasonably small airline with operations on a busy day you will have 100% load factor like Spicejet had on Monday.

Wow. They certainly seem to be the cheapest for some of the routes; and that would explain why they fill up like they do.

All said, I'd be curious if the number is 100% accurate or if they had a little slippage with their calculation.

Out of the domestic airlines there, they are certainly not the biggest airline within India, but aren't they number 7 or something out of the top 10 there (by some measure or another)?

They do fly to 11 destinations in India which cover most every city in which I've spent more than three consecutive days.

We should not confuse yields with loadfactors. You can get 100% loadfactors if you offer all your seats at Rs. 1/- per seat. Spicejet does seem to have industry leading load factors - what is not clear to me is their yields. Are they on par with the industry (in which case the load factors are impressive)? If the load factors are at the cost of yields, then that is a whole different story.

The LCCs in India still puzzle me. In the US, when WN pursued the low cost model, it used secondary airports where the airport fee were lower and cost models were different with employee stock options, no defined benefits pensions, etc. It is not clear to me what edge Spicejet or AirDeccan has on the cost side. Air Deccan at least uses non fare revenues to bolster revenue but Spicejet does not seem to have any other significant revenue sources besides fares.

Excellent points and I have the same questions too.

The fixed costs of the newer full-service carriers and the fixed costs of the newer low cost carriers will, over the longer term, be in the same league. Per employee labor costs are in the same league, and only marginally lower for the LCCs. (They have less deadweight in that they use fewer employees, but labor costs are low compared to capital costs, once those hit hard.) And the more variable costs are basically in the same league save issues around catering and overhead-related ones. Distribution costs may be lower but Spice and Deccan still hit up the local travel agent market there (even though they avoided the GDSs ... at least the last I cared to check). Administrative costs are lower but that and the lack of international flight-related costs cannot explain the sustainability of the model. I think these good price days won't last forever; and what we are witinessing is the de novos going after market share by riding on arrangements that don't seem -- to me at least -- to provide sustainable cost advantages over the longer term.

Spicejet has seven 737NG aircraft which are relatively new and should not be expensive in maintainance and fuel. But BBAM and GATX must me extracting their pound of flesh in terms of dry lease costs. It will interesting when the first LCCs will drop out of the indian skies due to financing problems.

Spicejet (and another LCC, Paramount, that flies Embraers, mostly in south india on secondary routes) have a very small fleet.

So what they do is schedule maybe one flight a day and time it so that it is just after the morning flights of the regular airlines like IC / 9W, or late night flights after the last IC / 9W flights leave.

This basically means that a lot of people who couldnt be ticketed on that flight, or missed it by being stuck in traffic etc can ticket on the LCC (and in some cases get the airline to endorse their tickets to the LCC)

Of course seat pitch being rather less than regular carriers, and all Y instead of two class, means they can pack in rather more pax per flight.

And they can outsource a ton of their stuff (dont need a dedicated maintenance plant etc with such a tiny fleet)

I don't buy the theory that Spicejet is filling its seats simply because of its scheduled timings. If that were the case, Jet/Sahara combo would tweak their schedules to increase loads. I think it has to do with pricing and routes chosen by Spice.

Jet being a public company has to focus on profitability. It is not clear to me that Spicejet is profitable - maybe they are foregoing profits for loadfactors. If so, it would be a bid error. I don't understand their positioning or strategy. They seem to be doing OK for now.

On the other had it took a while before ATA cut down drastically, Indepenance liquidated or Hooters Air shut down. We just have to watch I guess.

One advantage that LCCs have is that on some domestic routes in India, demand growth is 50%+ so everyone could do well. Consolidation may still be some years away.

Some new data by the govt seem to indicate that most of these carriers lost money recently despite high load factors. As I mentioned a few posts earlier, high load factors do not translate to improved RASM. You need both RASM to go up (load factor, yield, etc. are all factors that end up in RASM).

Spicejet does seem to have generated enough buzz to survive in business so far. Who knows what'll happen next.

The domestic market in India has gotten a little ahead of itself. While the demand is mind blowing, so is the capacity expansion. It is great for travelers like you and me but bad for investors. Investors are waking up after the recent Air Deccan losses - unbelievable for Indian conditions.

Spicejet being smaller has smaller losses but it is important to start focusing on differentiators to make the overall business succeed rather than the short-term buzz and low fares that get 100% load factors but leave you in the red.

Ryan Air is an interesting example of a carrier, that has high load factors, low yields but does very well on ancilliary charges (checkin bags, drinks, etc.). Spicejet has not yet demonstrated an ability to generate such streams of revenue so their LCC model is suspect as others have pointed out earlier.