India-based SpiceJet is challenging the conventional wisdom that freighters don’t make sense in the fleet of a low-cost carrier. The airline plans to grow its freighter fleet to six 737 NGs over the next twelve months – up significantly from the two freighters in SpiceXpress livery that exist today, according to a statement in SpiceJet’s fourth-quarter earnings release for the fiscal year 2018/2019 (ended 31 March 2019).
Less than a year ago, the rapidly growing carrier spun out a cargo subsidiary, SpiceXpress, and subsequently added its first 737-700BDSF, on lease from Spectre Air Capital [FATs 004645-4646]. Upon receipt of the first freighter, executives from the airline outlined plans to build out a four-unit freighter fleet comprising a mix of -700s and -800s. Following this week’s earnings release, the target is now six aircraft “during FY2020,” which ends 31 March 2020. Spectre Air Cargo confirmed to Cargo Facts that it will be working with SpiceXpress to convert and lease at least four more 737 NG freighters to the carrier.
In the coming months, placements with SpiceXpress are set to accelerate. In April, SpiceXpress added a second -700BDSF (30512, ex-Xiamen Airlines) [FATs 004855-4856]. The next three freighters to join the SpiceXpress fleet have already been inducted, or are being staged for, conversion at IAI’s conversion sites in Israel and China. All three aircraft will likely be placed with the carrier over the next few months, according to Spectre. Cargo Facts believes a third 737-700BDSF (29084, ex-Xiamen Airlines) is bound for the SpiceXpress fleet. Soon after, the carrier will add a pair of -800s to complement the trio of -700s – likely units 30474 and 30475, which Spectre acquired from the HNA Group earlier this year.
Turning to SpiceXpress’ strategy for its incoming freighters, initially, plans call for the development of a regional hub-and-spoke network centered around Guwahati, the largest and most populous city in Northeast India. SpiceXpress already operates scheduled freighter flights between Guwahati (GAU) and Hong Kong (HKG), and will later add flights from Guwahati to each of the seven surrounding states. A mixed fleet of -700s and -800s will enable SpiceXpress to better match capacity with demand on routes with lighter volumes. Although destination airports in the Northeastern states have yet to be identified, the -700F variant is also more suitable for operations at airports with shorter runways – many airports in the region have runways just over 1,500 meters in length. For now, we’ll wait for SpiceXpress’ scheduled routes to form a network. The time may finally be right for expanded freighter operations in India.