Primary Problem

The biggest problem for Spice jet at this point is to increase its operating
margins.
Secondary Problem
To gain back the lost customer trust.
Possible Solution
1. Cutting down turn around time from 25-30minutes to 20-25 minutes. If the
airline is able to cut down its turn around time by 5 minutes it can save huge
costs. Question is how?
Currently they operate 250 daily flights and want to increase the frequency but
due to shortage of aircrafts they are not able to do so. If they save 5 minutes
they get extra 1250minutes of flight time so they can operate additional flights
on busy routes, also will improve the on time performance helping its image. We
can question the scope of such reeducation but Southwest airline has done and
so can Spice Jet
2. Unification of aircraft type
They should decommission Bombardier aircrafts and use uniform aircrafts i.e.
Boeing 737's. This will help them to reduce cost. Right now Spice jet has to
maintain two different teams of pilots, cabin crew and ground staff for the same.
Plus they have to maintain larger number of spare parts and separate
maintenance crew.
Company cannot bring this change in the short run they have already ordered for
42 new aircrafts which they will only start receiving from 2018.
Secondary Issues:
As India's domestic aviation grows on the back of low fuel prices and increasing
demand, Spice-jet should try to get more and more Indians to fly on its network
by continuously introducing new flights, opening new stations and keeping to its
promise of consistent low fares.
Also it should prune its fleet by having
1)
Cap on flash sales would not account for more than four to five per cent of
total available seats. For Spice Jet, it would also help in restoring customers' trust
in a brand which was tarnished because of large-scale flight cancellations some
months ago.
2)
Also, the government policy encouraged induction of smaller aircraft. It
was a diversion from the global LCC model of having single-type aircraft fleet,
which keep financial and managerial complexities down and operations simpler.
3)
The management soon realized that they required two sets of pilots,
engineers and cabin crews. It also meant different contracts and additional cost
of maintenance, repair and overhaul (MRO).
4)
When it changed hands earlier this year, the airline was already defying
the conventional LCC model by having a fleet of Boeing 737 and Bombardier

Q400 aircraft. LCCs usually stick to a single aircraft type to save on maintenance
costs. Then, it went ahead and got on wet lease two Airbus 319 aircraft to tide
over capacity issues. So now, it in effect has a fleet comprising 18 Boeings, 14
Q400s and 2 Airbus 319 aircraft. Unless it rationalizes fleet, LCC cost synergies
may continue to elude the airline.

Ancilliary:
1)

Scrap of business class. (Legroom, food etc)

2)

Cap on flash sales would not account for more than four to five per cent of
total available seats

3)

Strategic investment by any foreign airline so that synergies can flow in,
also will provide access to foreign routes

4)
5)

Renegotiation of the contracts of lease to cut in costs of MRO

Prime focus on: core i.e customer