SpiceJet has operated nearly 10,000 cargo flights since March, when India first went into lockdown. The airline has taken full advantage of its dedicated cargo fleet in this time, filling up the cargo capacity gap due to a lack of passenger flights. SpiceJet has also wet leased a converted Airbus A340 to increase capacity and fly long-haul cargo routes.
Exponential growth
A bulk of global freight is flown in the belly of passenger aircraft, accounting for nearly 65% of the market pre-COVID. However, India’s decision to ban all domestic flights in late March suddenly left the market with a dire shortage of cargo capacity. With most passenger planes on the ground, SpiceJet made full use of this shortage.
SpiceJet is the only Indian passenger airline with a dedicated fleet of cargo aircraft. This fleet consists of five 737BCFs (Boeing Converted Freighters), three converted Q400Fs, and one wet-leased A340, according to Planespotters.net. This fleet has allowed it to carry out substantial cargo operations while other airlines were left flying a handful of cargo-on-seat flights.
In a statement to PTI, seen by Business Standard, SpiceJet has flown 9,950 cargo flights since March 25th and carried 77,000 tonnes of freight. This level of activity has seen SpiceJet become the largest cargo operator out of Delhi Airport among all domestic and foreign carriers.
Source of revenue
SpiceJet has managed to narrow its losses and beat expectations in the last two quarters thanks to its cargo business. Cargo revenue rose 144% in the second quarter, allowing the airline to cushion losses from the grounding of passenger flights. This impressive growth has continued into the third quarter, bringing down SpiceJet’s net losses.
Seeing the market’s growth, SpiceJet opted to lease an Airbus A340 from Portuguese wet lease operator Hi Fly. The aircraft has allowed SpiceJet to enter new long-haul markets such as Frankfurt and carry more cargo. It should be noted that the plane is a passenger aircraft which has temporarily converted for freight operations by removing seats.
Expansion continues
Cargo isn’t the only market where SpiceJet is hoping to see long-term growth. The low-cost carrier is also starting its first long-haul route to London next month using a wet leased A330neo. It’s clear that SpiceJet is trying to capitalize on the pandemic as much as possible, with new domestic routes also being added frequently.
However, the airline still faces serious hurdles. Last month, the carrier was sued for unpaid leases worth over $27mn and is running dangerously low on cash. Even as it continues to expand, SpiceJet could face serious financial troubles soon.
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