SpiceJet plans hangar facility at Hyd intl airport

SpiceJet is looking at having a hangar facility at the Hyderabad International Airport (HIA) in order to strengthen its infrastructure and ensure better maintenance of its aircraft.

Siddhanta Sharma, chief executive officer, SpiceJet Ltd, told Business Standard that the company was in discussions with HIA and had asked the authorities to either build a hangar for the company or allot land for building the facility on its own.

In case HIA sets up a hangar facility, SpiceJet would look at using the facility by paying rent. If HIA authorities decide to allot land for the hangar, the company would invest about Rs 22 crore to build the facility, he said.

Decisions on various aspects of building the facility are expected to be finalised by the fourth quarter of this year. SpiceJet already has a hangar facility in New Delhi.

Bullish on future growth, the low-cost private carrier is embarking on a major fleet expansion programme and is planning to acquire 10 Boeing 737-800 aircraft. This acquisition is expected to be completed by 2007-end. At present, it has six aircraft.

The company plans to fund its expansion from the $80-million that it raised through the foreign currency convertible bonds (FCCBs) issue and the $12.5 million raised through an equity issue.

The company also saw a rise in its passenger load factor. It reported over 85 per cent load factor over the last few months and crossed 90 per cent in May. About 1.8 million passengers were reported to have travelled by SpiceJet so far, 40 per cent of whom were first-timers, he said.

Stating that about 70 per cent of the ticketing was done online, he added that the carrier was able to maintain the distribution cost at 3-4 per cent, compared with 13 per cent by the full service airline.

"We are keen to consolidate on the progress we have made and to grow on that," he said, adding that the carrier was expected to break-even in the next 3-4 months.

SpiceJet plans to station an aircraft in Chennai from November and another in Hyderabad from December this year.