SpiceJet plans to venture into retail: Report

S V Krishnamachari
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Shares of low-cost carrier SpiceJet were trading with gains of almost 3 percent at Rs 81.50 on the Bombay Stock Exchange (BSE) at around 1.40 pm. A business news channel has reported the Ajay Singh-controlled carrier plans to enter India's retail sector with presence in both online and offline (physical stores) formats. 

The goods will be sourced from various vendors in India and abroad and sold under the "Spice" brand, the Moneycontrol.com quoted sources as saying. The product category is likely to include gadgets, food and fashion items. 

The news reminds us about the fate of one of the famous liquor business owner who forayed into the glamorous civil aviation sector, launching the full-service carrier Kingfisher Airlines (KFA). A slew of setbacks later, he realised that the KFA was destined to remain grounded, for a variety of reasons. Yes, we are talking about Vijay Mallya, who is wanted by Indian banks for unpaid loans running into crores of rupees.

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SpiceJet, which reported its eighth straight quarter (October to December 2016) of profit, is one of the turnaround successes in India Inc. The carrier earned net profit of Rs 181 crore on total sales of Rs 1,642 crore.

The budget carrier commands 12.8 percent share in the Indian civil avaition market, the fastest-growing in the world.

The Indian domestic air travel market is expected to post a growth rate of about 23 percent, though carriers saw their net profit margins taking a hit in the December quarter on account of rising fuel costs that constitute almost a third of operating costs.

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There are 12 domestic carriers in India, including IndiGo (the largest in terms of passenger volumes), state-owned Air India, full-service carriers Jet Airways and Vistara, budget carriers AirAsia India and GoAir, and the latest entrant, Zoom Air. 

IndiGo-owner Interglobe Aviation and Jet Airways  are listed on Indian stock exchanges.

Qatar Airways is the first foreign airline to have evinced interest in entering the Indian civil aviation space with a fully-owned arm, a move that is reportedly being opposed by the Federation of Indian Airlines (FIA). "We will definitely think of taking this to the courts," the Mint quoted an executive at a member-airline of the lobby group, as saying. Members of the FIA include SpiceJet, GoAir, Jet Airways and IndiGo.

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