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Low Cost Airline’s interesting measures to increase efficiency 

What a difference a year makes for Indian low cost airline Spicejet. On the verge of shutting down in December 2014 with $300m of debt with suppliers refusing to refuel planes unless paid upfront and staff not been paid their monthly salaries, the airline has made a remarkable recovery. Today it is filling 93% of available seats and has made a profit in the last 4 quarters.

What has been the cause of the turnaround?

  • Aircraft fuel expenses dropped nearly 35 percent
  • Demand has increased – compared to the previous year Indian airlines carried 20% more passengers in 2015.
  • Negotiated better terms with aircraft-leasing firms
  • Cut jobs and managers pay
  • Scrapped unprofitable routes

SpicejetMeasures to reduce inefficiencies of Spicejet

  • Reducing the time to second-tier cities and thereby making it possible to fit in an extra flight a day.
  • Steel brakes on wheels of Boeing 737 were replaced with lighter carbon brakes
  • In-flight magazines reduced – less weight
  • Meals served in cardboard boxes instead of plastic trays – reducing fuel consumption
  • Planes were filled with just enough fuel within safety margin
  • Landing gear was deployed 8km from touchdown instead of 14km – reduce drag
  • Taxi on the runway using just one engine – more fuel efficient
  • Stocks of spares parts are now more readily available so planes spend less time on the ground

Although the airline still has a long way to go to reduce its debt its recent performance has enabled it to think about long-term expansion.

 

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