In what it hopes to be a game-changing idea, low-cost carrier Spicejet has started offering commercial operations to tier II and tier III destinations from Hyderabad, with fares of Rs 999 to begin with.

It has brought in Q400 from Bombardier — the short haul aircraft — for these destinations, and expects these services to add significantly to its revenues after a year or so. “This will be a game-changing aircraft and we will look forward to bringing it in other cities as well in the future. It will also give us a de-risk opportunity from the point of view of bottomline and revenues, which could be contributed within 12-18 months of commencement,” said Neil Mills, CEO, Spicejet.

The Kalanithi Maran-promoted company ordered 30 such aircraft and has received the delivery of four so far. All aircraft would be delivered within July 2012, Mills said adding that the airline expects to achieve a 75 per cent load factor. It has spent $270 million on ordering the aircraft, mostly financed through Export Credit Canada.

“Tier II and III destinations are usually offered inferior products. Though there is already a lot of competition in the lowest seat cost in regional markets, we can see that this initiative will change the traveling habits of consumers,” he said.

Spicejet has faced losses in the past two quarters owing to rising fuel charges and threat from competitors who had dropped prices significantly. “The biggest turn around for us will be when one or two competitors stop pricing irrationally,” he said.

Meanwhile the GMR International airport at Hyderabad hopes to clock a 17 per cent growth in passenger traffic handled every year, according to Vikram Jaisinghania, CEO of the airport. Last year, the airport handled 7.6 million passenger traffic, which could go up to 8.8 million this year.