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Spicejet Case Study

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The decline of SpiceJet and its fallout on Indian airlines industry

Market Share:

SpiceJet fiasco worked as wonders for its competitors. Other airlines are making most out of the fall of cash-strapped carrier SpiceJet, once a dominant player in aviation industry and have been evident from increase in market share of Air Asia India, Indigo and Jet Airways. These airlines have increased number of flights in routes in which SpiceJet has withdrawn its operations to cash Crunch Company is facing. SpiceJet has reduced its operations from more than 350 daily flights to 220 daily flights. Air Asia India, Bangalore based airline and new entrant in market, which has been attacking market share of SpiceJet since inception will be looking for huge chunk …show more content…

14 crore to oil companies for jet fuel. Though, SpiceJet has paid Rs.13 crore to oil companies to revive back its operations. Airline has been operating on cash-for-carry basis. Airline has liabilities worth of Rs.1700 crore to lenders and suppliers. It has been reporting losses from past 5 quarters. DGCA( Directorate general of Civil Aviation) has ordered SpiceJet “No advance booking beyond a month”, as SpiceJet have frequently cancelled flights, 1861 flights up to December 31.The fall will create bad name for industry as a whole and might lead to blacklisting by banks, aircraft makers and leasing companies, as well as airport operators and fuel suppliers, both in India and abroad. Though Chief executives of foreign airlines don’t see the fall of SpiceJet as big blowback to Indian aviation industry, they think this is high time that government looks into the root causes of failure and act upon issues like high airport fees and fuel taxes to make environment more investment …show more content…

SpiceJet connects its network using next generation fleet of 32 Boeing 737-800 and 6 Boeing 737-900ER aircrafts and 15 Bombardier Q400 aircrafts which focused on operations in Tier-II and Tier-III cities. With Decline of SpiceJet, there will be inconvenience for passengers travelling from these cities to metros. Once, SpiceJet will be out, its market share will be grabbed by big airlines and IndiGo will become most dominant player in airline

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