IndiGo, SpiceJet seek govt nod to shun T3 over cost pinch

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Reeling under the impact of high operational costs, primarily due to higher jet fuel prices and airport charges, the top two budget carriers have sought government nod to shift their international operations to the domestic terminal from the existing T3 in Delhi.

"The ministry has received the proposals from IndiGo and SpiceJet, requesting to allow them operate from the 1D terminal instead of the T3 on account of higher costs of operations," according to sources.

While IndiGo with 23.9 per cent market share was the largest no-frills carrier in May, the SpiceJet's share was 18.5 per cent in the overall pie in the month, making it the third largest domestic carrier.

The government has, however, yet to take a call on their request, they said without divulging further details.

Fuel prices, though of late came down to the tune of 25 percent in dollar terms, a steeper fall in the rupee has offset the resultant benefit for the airlines.

Apart from this, the airport development fee (ADF) at the Delhi airport has skyrocketed by a massive 346 percent since last month after the sectoral regulator AERA allowed the airport operator's plea in this regard. In fact the Delhi airport had demanded an over 800 percent spike in ADF.

At present, the national carrier Air India and the two full service private carriers -- Jet Airways and Kingfisher Airlines -- operate from the T3 of the Delhi airport (Indira Gandhi International Airport), while SpiceJet, IndiGo and GoAir from the old domestic terminal called 1D. The AI, Jet and KFA are even running their domestic services from the spanking new T3 terminal.

IndiGo operates 8 international flights every week connecting Bangkok, Singapore, Dubai, and Kathmandu with Delhi, while the Chennai-based SpiceJet, which plans to launch services to Dubai from next month, currently flies to Kathmandu from the national Capital.

Meanwhile, airlines sources say the proposal, if accepted, will not only help them bring down the operational costs but also in better manpower management.

"The overhead operational charges that low-cost airlines have to pay for operating from T3 are around 300 per cent higher than same from the domestic terminal. Besides, they have to park aircraft at two places and along with that other paraphernalia such as engineering facilities and ground-handling staff, etc. Operations from one single place will also bring synergy besides reducing costs," they argue.

SpiceJet, which reported over four-fold rise in net loss at Rs 249 crore in the March quarter, will be directly importing jet fuel to slash operating cost from middle of next month.