27 September, 2020

‘Marans Made A Bad Call With SpiceJet’

SpiceJet fou­nder Ajay Singh on where the Marans went wrong.

Tribhuvan Tiwari
‘Marans Made A Bad Call With SpiceJet’

For the second time around, SpiceJet fou­nder Ajay Singh is trying to revive the airline. In 2005, he had resuscitated the then defunct Modiluft into its present avatar. This time, Ajay feels the previous owners—the Maran family of the Sun group, currently being questioned in the Aircel-Maxis telecom case—really went wrong with their strategy. Excerpts from an interview with Arindam Mukherjee:

Where did the Marans go wrong with SpiceJet?

Firstly, the cost structure went wrong. Some of the contracts that were signed imposed a cost which was not sustainable. Second, they deviated from what was essentially a low-cost model by opening up at airports across the country. They went for breadth rather than depth. A low-cost airline needs to have multiple flights to a station rather than opening many stations. Structurally, that was wrong. They also took a second line of planes instead of a single aircraft fleet.

In terms of revenue, they seemed to be going after...



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