SpiceJet ties up with Germany's Hahn Air to explore markets overseas

Low-cost carrier SpiceJet on Monday said it is embarking on a global market strategy to expand beyond its traditional markets. The airline inked an agreement with Germany's Hahn Air, which would enable SpiceJet to now sell flight tickets on Hahn Air's booking system.

This gives SpiceJet direct access to a global platform while easing passengers' travel worldwide, the airline said in a statement. The airline has outlined Europe among foremost target markets in its global outreach program after the tie-up.

"The time is ripe for us to reach out to a wider audience while enabling our customers to avail an extensive network with elevated convenience. The association will help us to penetrate the untapped markets which will in due course reflect in our business growth proposition," Shilpa Bhatia, Senior Vice President (commercial) at SpiceJet, said in a statement.

Hahn Air is Dusseldorf-based global leader in providing distribution services for air, rail and shuttle partners and the ticketing expert for travel agents. Apart from giving access to retail customers worldwide, the global platform offers a tremendous network to non-GDS airlines enabling them to be booked through over 95,000 travel agencies in 190 markets.

SpiceJet can benefit from Hahn Air's economies of scale and would have the potential to increase its revenue streams by being able to penetrate newer geographies, and reach out to a wider target audience.

SpiceJet reported 104 percent rise in net profit for the first quarter (Q1) ended June 2016 to Rs. 149 crore and 37 percent increase in revenues to Rs. 1,522 crore. Fuel costs dropped 11.36 percent to Rs. 399.67 crore in Q1 from Rs. 358.88 crore in the quarter ended June 2015. Analysts expect the company to post consistent growth in the coming quarters on the back of multiple factors.

For the month of July, SpiceJet recorded lower domestic share at 11.7 percent, as compared to 12.7 percent in June. The budget-carrier recorded the highest passenger load factor (PLF) at 92 percent in July.