SpiceJet chairman Ajay Singh.

NEW DELHI: Last October, SpiceJet had received feelers to acquire Jet Airways , but talks did not go far. As the lowcost carrier looks to add 40 aircraft to its fleet of 63, SpiceJet chairman Ajay Singh has told TOI that the airline was worried about Jet’s liability. While SpiceJet prepares to fly the planes leased from Jet from Friday, Singh insists that the decision to expand has not been taken in haste or under pressure. Excerpts:

Did you receive feelers from Jet Airways to take over the airline?

Yes, we had received feelers from Jet as well as bankers. That was inevitable because we are an airline operating in India and have been part of a turnaround story. We did look at it carefully, but size of the liability was too large for a relatively smaller airline like us.

How many of the Jet planes are you leasing and how many people are you hiring from there?

We will try and lease as many as we possibly can. There is a large gap that has been created and there is a great deal of passenger inconvenience — certain destinations have been knocked out of the map, fares are completely unsustainable and there will be more pressure as we approach a busy season. Since SpiceJet is the only airline that operates Boeing aircraft, we are the only ones in a position to absorb some of the de-registered aircraft. We have applied for 28 aircraft so far and the number can be up to 40. We will hire close to 2,000 people from Jet.

What about their salary, since they have to take a huge pay cut?

We are hiring people at the same pay scale at SpiceJet because we cannot afford to change our own structure. But, the salary is quite competitive as far as pilots and cabin crew are concerned.

Out of 28 aircraft that you plan to lease, how many have been cleared?

So far, 16 have been cleared and we start by flying five from Friday. Every week we will be adding aircraft because there is a process. We are just putting our sticker as the objective is to increase the capacity.

Will we see more Boeing 737s on international routes?

The first objective is to handle domestic traffic, but we will fly on new international routes such as Mumbai-Bangkok, and other destinations such as Hong Kong , Dubai and Jeddah. We should have Indian carriers flying Indian passengers. We have to collaborate with foreign airlines like Emirates, as we have done, but we will also compete with them.

You are on a major expansion drive despite a very thin profit in last quarter. How prepared are you to take on the burden at a time when oil prices are expected to rise? Is it an expansion in haste?

It is not an expansion in haste. We added 12 aircraft in December and it happened without any glitch. Yields are higher than the last quarter. Although they will not stay at these levels as you add capacity, yields will be sufficient for reasonable profits. We have enough cash and the new operation we are mounting with 40 aircraft is significantly profitable. In aviation, when you launch flights, you open it for booking and cash flows start.

Was there a nudge from the government?

The government had reached out to every airline. It suggested that capacity should be added in consumer interest and others are also adding capacity.

Is there a possibility of an investment by Emirates?

Right now, it is a partnership. At this time, there is no investment. We will be talking to others as well for partnership for other parts of the world.

Double-digit growth story in aviation has been halted due to problems at Jet.

When do you see a pick-up?

As soon as capacity is absorbed, as underlying demand is extremely strong.

When will airfares go back to levels seen six-seven months ago?

I hope they never go back to those levels, but they should not be as high as today. So, equilibrium is somewhere in between.

First, Kingfisher went bust. Now Jet has suspended operations. Air India is also in a bad shape financially. What is wrong with Indian aviation?

We need to rationalise taxes of jet fuel. The cost of ATF (aviation turbine fuel) for domestic flights in India is the highest in the world. This means despite being a huge market, we depend on foreign airlines for flying medium- to long-haul planes. India should give the right environment for its own carriers to be strong enough like the large foreign ones.

What kind of compensation will you get from Boeing?

Right now that is being discussed. We need to get our Max aircraft running again, which we hope to do in June or July.

