Continuing troubles plaguing the aviation industry affected SpiceJet as it reported lower net profit despite increase in load factor and passenger yields during the June quarter. The carrier intends to renegotiate contracts to contain cost
SpiceJet Ltd posted 19% lower net profit at Rs50.55 crore for the June quarter, compared to Rs62.44 crore a year ago, impacted by weak rupee, high cost of fuel. The airline’s revenues was Rs1,704 crore, a growth of 16% as compared to the corresponding quarter a year ago.
According to SpiceJet, “Several headwinds in the form of a weak rupee and high cost of fuel, the management has executed with an emphasis on efficiency, elimination of waste and profitability.” The airline is implementing a serious of measures such as fare and route rationalisation, optimising aircraft utilisation, improving operational efficiencies, renegotiation of contracts and other cost control measures to improve the company’s operational performance.
Fuel cost as a proportion fell to 43% of the total revenue in the current quarter as against 46% in the comparable quarter for the previous year, mainly due to better realizations from our overseas routes that now make up almost 11% of revenues. However, currency depreciation and higher crude prices continued to exert pressure on margins.
The average passenger yields in the quarter increased by 5%, to Rs 4,278 from Rs. 4,068, as compared to the corresponding quarter a year ago. Domestic market share increased to 19.50% from 18.60% and the airline saw 13% growth in number of passengers coupled with 25% growth in available seat kilometres and 27% growth in number of departures. This resulted in increase in load factor from 77% to 80%.
“SpiceJet continues to explore newer opportunities for business growth and to improve fleet utilizations. In this regard, the Company is aggressively adding to its international network and implementing multiple initiatives with a view to controlling the overall cost of doing business,” the release said.
Spicejet closed Monday flat at Rs25.75 on the BSE, while the 30-share Sensex ended marginally up at 19,182.
Inside story of the National Stock Exchange’s amazing success, leading to hubris, regulatory capture and algo scam
Fiercely independent and pro-consumer information on personal finance.
1-year online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
Fiercely independent and pro-consumer information on personal finance.
30-day online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
Fiercely independent and pro-consumer information on personal finance.
Complete access to Moneylife archives since inception ( till the date of your subscription )
