SpiceJet is in focus on expanding cargo business

The low cost carrier SpiceJet is planning to launch a door-to-door cargo delivery service. The company is looking forward to explore wide revenue stream.  It is going to set up an infrastructure required for the cargo service, which is expected to launch in the current financial year.

Considering peer competitors of SpiceJet, Jet airways already started express cargo service in May 2015. Another airliner Indigo (Interglobe Aviation) a newly listed entity on bourses is already present in the business of cargo delivery and delivers more than 12000 tonnes of cargo. SpiceJet is going to expand its cargo business.

SpiceJet is already carrying cargo from its passenger flights and now the company has placed an order for 100 sub three tonne trucks from Mumbai based commercial vehicle maker, and is also leasing commercial space for 40 warehousing facilities across the country. SpiceJet is also working on allied businesses like Spice Locations and trying to build a logistics and holiday business as well. The company is also trying to build an aviation academy.

On financial front, SpiceJet’s cargo business clocks around 15 per cent of its total revenue base as on FY15. According to company’s management they are focusing to maintain 20 per cent of its revenue base during current financial year. Its revenue stands at 3613 crore in 9MFY16. The Brent crude oil is trading below USD 30 per barrel on intraday basis which is helping airliners in the country. SpiceJet is going to get business from booming ecommerce market in India. The company is working on both distribution and creating infrastructure for the operations.

SpiceJet extended its daily operations to more than 290 flights from 250 flights during festival seasons. The company also started two new flights to Dubai from Hyderabad and Jaipur. During current financial year, it also reported a Passenger Load Factor (PLF) of more than 90 per cent, which is higher than all the other airlines operating in India. Its market share also improved to 13 per cent from 9 per cent during the last calendar year.

The share price of SpiceJet increased by 2.85 per cent on bourses in early trades on Wedesday; and is trading at Rs 76.85 on an intraday basis.

SpiceJet is provider of air transportation services. The company operates approximately 250 daily flights to around 41 destinations, including around 34 domestic and seven international. It connects its network using fleet of around 20 Boeing 737 and two Airbus A319 aircrafts, along with around 14 Bombardier Q-400 aircrafts. SpiceJet Cargo, a division of SpiceJet airlines, offers air freight transportation across India. SpiceJet Cargo offers products and services, such as general cargo services that cater to all types of general cargo, the exceptions being valuable cargo and goods classified under dangerous goods. The company offers domestic and international charter services.