Spice Jet Remodelling Itself Through a Low-Cost Model

A couple of years back, Spice Jet was dead and buried, saddled with huge debt, low traffic and a muddled marketing policy. The carrier was also left open to hostile takeover bids. But time passed and it has been two years since. Spice Jet is still afloat and trying to change its path by looking at its costs first. Spice Jet wants to cut its cost down and bring operating discipline into its airline. This will be done by renegotiating leasing deals and tariffs at airports for abroad destinations. It wants to bud services like food beverages, wi-fi separately from the actual tickets. By rearranging its capacity for the economy seats, it can reduce cost per seat. This all goes in keeping the cost of a ticket low.

Once low cost has been achieved, Spice Jet wants to look at destinations in western and eastern Europe and also exotic far-flung destinations. If it can keep the cost of a two-way ticket to a destination in Europe to under Rs 30,000 range, new opportunities will begin to open up. Imagine the airline can sell Delhi to London tickets and back all for under Rs 15,000, now that is a real steal.

The airline Spice Jet is currently revaluating these routes and newer destinations as it gets ready to order 50 more carriers to expand its current fleet. With India growing richer and average GDP on a rise year on year, we have become a well-connected global society and have started showing this in our travel needs and habits. Once a price of a ticket can be kept low, new destinations and prospective markets suddenly look viable and Spice Jet can bet its revival on that plan.

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