SpiceJet designated to fly to US; Experts say flying to US will be difficult

NEW DELHI: SpiceJet has been designated as an Indian scheduled airline to operate services to the United States, a milestone that the airline claims is expected to help the company better chart its international expansion plans.

However, industry experts say that getting designated as a carrier is the easiest part and launching flights to the US would be difficult.

Sources add that other Indian airlines may have also got designated airline status.

Currently, state-run Air India is the only other carrier designated to fly to the United States from India. It is also the largest Indian carrier on the India-US route.

“This is to inform you that in terms of the Air Services Agreement between the Government of India and the Government of the United States of America, SpiceJet has been designated as Indian scheduled carrier to operate on agreed services between India and the USA,” the airline informed the Bombay Stock Exchange on Thursday.

“I have always maintained that there is an opportunity in every adversity and the present crisis situation has seen SpiceJet rise to the occasion and play a pivotal role,” said Ajay Singh, chairman and managing director of SpiceJet, in a statement.

“From operating over 4,300 cargo flights to carrying over 24,000 tons of cargo to operating over 400 charter flights to bring back thousands of stranded Indian nationals back home, SpiceJet has worked non-stop and contributed in whatever manner possible,” Singh added.

Industry experts, however, said getting designated as a carrier is the easiest part, as launching flights to the US would be difficult for the Gurugram-based low-cost carrier.

“The US and India have an Open Skies agreement, so getting a designation from the home country is not the challenge. The challenge is getting approved by the other side (the US department of transport), where they look at both safety and financial viability,” said an industry insider, who did not want to be identified.

“Not having declared results for months despite being a listed carrier, and having negative net worth, it (SpiceJet) will have to convince the DOT that it is financially viable,” the person said.

Even if the airline launches flights to the US, it will be difficult to run it profitably, the person said.

“Operations between India and the US are notoriously challenging (without guaranteed passengers through various connections). It is a very high cost operation with a lot of competition in normal times, and it can break a financially weak airline,” the person said.

However, as long as there are capacity constraints (in the current Covid-19 situation) and some carriers in the Middle East and Europe being barred from carrying people between India and the US, it can be lucrative, he said.