Down but not out SpiceJet clocks highest load factor in July ahead of AirAsia India, Go Air

Written by fe Bureau | Mumbai | Updated: Aug 21 2014, 17:35pm hrs
SpicejetSpiceJet posted passenger load factor of 79.4% for July, ahead of AirAsia India's 69.8% and GoAir's 69.7%.
Low-cost carrier SpiceJet has registered the highest load factor among commercial domestic airlines for July, beating GoAir, which occupied the top slot in June, according to the latest data released by the Directorate General of Civil Aviation (DGCA).

The Chennai-based airline posted a load factor of 79.4% for July, ahead of AirAsia India (69.8%) GoAir (69.7%), Air India (69.6%), Jet Airways (69.5%), IndiGo (67%), Air Costa (66.5%) and JetLite (63.6%).

SpiceJet, which had registered a load factor of 81.4% in June, was behind GoAir, which registered 81.5% load factor during the same period.The high load factor by SpiceJet is being attributed by analysts to the heavy discounts by the airline.

Passenger load factor in July declined appreciably compared to previous months due to the lean season, coupled with active monsoon in some parts of India, DGCA said in a statement.

SpiceJet, the country's second-largest domestic carrier in terms of passengers, reported a loss of Rs 124 crore for the quarter ended June 30, earnings for which were announced on August 14. The losses reported by the airline have even led auditors to raise concerns. As on June 30, the company's total liabilities exceeded its total assets by Rs 1,145.6 crore, the airline's auditor SR Batliboi and Associates Llp said.

These conditionsindicate the existence of a material uncertainty that may cast doubt about the company's ability to continue as a going concern, it added.

However, senior SpiceJet officials told FE that the airline's turnaround plan was under way.

There are massive efforts ongoing on both the cost and revenue fronts, in addition to an all new and rationalised network and achieving operational efficiencies, the SpiceJet official cited

earlier said. He declined to be identified.

To this end, SpiceJet has started filling up empty seats by offering heavy discounts, which have ensured that fixed costs, such as taxes and fuel charges, are recovered even if the airline

doesnt make any profit from those seats.

As our Q1 operating results demonstrated, our increase in loads this year has not been at the expense of yields, the airline's chief operating officer Sanjiv

Kapoor said in statement on Wednesday.

Our increase in loads and share is the result of our new network, improved branding and product, and most importantly, our dynamic pricing and revenue management approach where we believe flying empty seats, which is the ultimate perishable commodity, is a waste especially for budget airlines, he added.

The DGCA report also added that the passengers carried by domestic airlines during January-July 2014 period stood at 3.76 crore,

up from 3.59 crore during

the same period of the previous year.