When Spicejet announced its plans for covering the international destinations such as Riyadh in Saudi Arabia, Guangzhou in China and Hong Kong, it came as a pleasant surprise to the industry watchers since it was a marked departure from the oft-beaten path which the other airlines have taken. The route selection for international flights was significant since these brought out a clear strategy of Spicejet to realize the potential of those routes which do not have much competition but hold good, hitherto unexplored, promise for future.
By using this strategy, Spicejet not only aims to open up the new markets with the latent demand for connectivity but it also plans to gain an early-bird advantage when the competition is not so stiff in these sectors. Further, by studiously avoiding the segments which are already having high demand and where the lowest air fare is already ruling the roost due to high competition, it wants to utilize its assets and resources more productively.
This strategy of this lowest air fare airline has also been tried successfully in the domestic arena where it is operating the point-to-point flights to cities like Dehradun. By using the point-to-point model in place of hub-and-spoke model, it is ensuring that the operations remain focused and the flight schedules are not adjusted to make way for the connecting flights which was one of the prime reasons for the debacle of earlier airlines which used this methodology of operations.
To what extent will this strategy be successful remains to be seen as the response of the market and the moves of the competitors become clear. But, it is definitely a more innovative and ambitious strategy for being a market leader and turning more profitable by the end of next financial year.