SPICEJET POSTS ~389 CRORE Q2 LOSS
MUMBAI: Low-fare airline SpiceJet Ltd on Wednesday posted a second straight quarterly loss as increase in fuel costs and a weak rupee offset higher revenue.
The Gurugram-based carrier’s stand-alone net loss, excluding results of SpiceJet Merchandise and SpiceJet Technic, stood at ₹389.37 crore at the end of the September quarter. It had a profit of ₹105.27 crore a year earlier.
SpiceJet’s revenue grew 3.7% from the year earlier to ₹1,910.30 crore in the September quarter.
Expenses rose 32% to ₹2,299.67 crore as fuel costs surged 56% to ₹845.07 crore.
“It was a bit disappointing for us to report a loss. Also, the September quarter is traditionally a weak quarter when it comes to demand (for flying), so there was a pricing pressure on the airline,” SpiceJet’s chief financial officer Kiran Koteshwar said over phone.
“We don’t expect steep increases in macro parameters (oil and rupee),” Koteshwar said as he forecast crude oil to stay at $65-70 a barrel in the coming quarters.
In the past year, Brent crude has gained 6.58% to $66.3 a barrel, while the rupee has weakened 11.68% against the dollar. Along with high costs, the hyper-competitive nature of the industry has prevented airlines from raising fares substantially. SpiceJet’s listed rivals Jet Airways and IndiGo previously reported losses in the September quarter. Oil prices have declined steadily in the last few weeks.
The lower pricing environment is a thing of the past as airlines will raise fares during the upcoming quarters, which are generally considered busy, Koteshwar said.
“We will also see a lot of costs coming down as we take deliveries of our fuel-efficient Boeing 737 Max planes,” he said.
SpiceJet, which ordered in January 2017 205 Boeing planes valued at $22 billion at list price, has received four Boeing 737 Max planes so far, and is slated to receive 18 more over the next six months. It also added two Bombardier Q400 turboprop planes in the last few months. SpiceJet plans to use a large number of Boeing 737 Max planes to expand its international operations in the coming quarter, Koteshwar said.
“We are starting Hong Kong from Mumbai and Delhi apart from adding frequencies to Bangkok. We will definitely have more international operations by the end of the fiscal,” he said.
SpiceJet, which had a 12% share of the domestic aviation market in September, has no plan to convert a part of its Boeing 737 Max orders to wide body planes, which will enable it to fly to Europe and other long-haul destinations.