SpiceJet reports Rs 171 crore loss in quarter on forex losses, rise in ATF costs

Written by PTI | Mumbai | Updated: Feb 15 2014, 20:40pm hrs
SpiceJetThe company's finance cost also went up to Rs 30 crore from Rs 24.35 crore a year ago. Reuters
Hit by forex losses and high fuel costs, budget carrier SpiceJet today reported Rs 171-crore loss for the quarter to December, as against a profit of Rs 102 crore in the year ago quarter.

The red ink came even as the Chennai-based carrier saw its revenue growing by 14 per cent to Rs 1,807 crore and a traffic growth of 10 per cent during the quarter. The airline booked Rs 63 crore in forex losses.

"Despite good growth, there were constraints on the industry's ability to increase yields sufficiently to neutralise the impact of cost increases, which were mostly led by a weaker rupee.

"The approximate impact of currency depreciation alone, despite a hedging programme that SpiceJet has in place, was around Rs 63 crore during the quarter," Media baron Kalanithi Maran-promoted SpiceJet said in a statement.

The company's finance cost also went up to Rs 30 crore from Rs 24.35 crore a year ago. It also spent 9 per cent more on ATF than in the same period last year, as the currency effect has been fully passed on to the local carriers by oil marketing companies.

This had the overall fuel costs rising to 52 per cent of the total revenue in the current quarter as compared to 45 per cent in the comparable quarter previous year.

Similarly, several other costs that are denominated in US dollars, such as lease rentals, maintenance, spares etc, went up sharply as a result of the adverse forex rate, the airline added.

Last week another listed airline Jet Airways had reported a loss of Rs 267.89 crore for the three months to December as the carrier was bogged down by rising expenses due to high fuel prices and the rupee's depreciation against a net profit of Rs 85 crore in the year-ago period.

Similarly, the grounded Kingfisher Airlines also posted a whopping Rs 822 crore loss in the December quarter.

Cost per available seat kilometre (CASK) of SpiceJet saw an increase of 10 per cent to Rs 3.9 in the quarter, compared to Rs 3.5 in the same quarter last year.

Average passenger yields grew 3 per cent to Rs 4,551 as against Rs 4,412 last year, which was not sufficient to fully offset cost increase.

Unfortunately, it was unable to effect stronger yield increases since air travel softened during the year, exacerbated by more seats on offer due to the planned addition of ircraft by the industry, including SpiceJet itself.

Load factor accordingly decreased to 70.5 per cent from 75 per cent, contributing to overall revenue per available seat kilometre (RASK) declining 6 per cent from Rs 3.8 last year to Rs 3.6 this year.