Low-cost airline SpiceJet on Tuesday reported a 24.50% year-on-year decline in its net profit to Rs 181.14 crore in the October-December quarter as a result of demonetisation which resulted in reduced contribution from the international routes, capacity addition and increasing cost like rentals, fuel charges and other expenses.
Revenue or net sales increased 11.34% y-o-y to Rs 1,602.66 crore on the back of increased domestic travel during the Diwali and Christmas holiday period but international revenues were under pressure. International routes contribute almost 25% to the total revenues of the airline.
“The impact of demonetisation is still there but I think we have performed really well given the circumstances. It will still take another two to three months for the demand to come back. We are trying to focus on the profitable routes to maintain profitability,” said Ajay Singh, chairman, SpiceJet.
In terms of the cost, the jet fuel expenses which constitute almost 40% of the total operating cost, increased 29.22% y-o-y to Rs 473.77 crore. While rentals increased 5.87% y-o-y and the same for other expenses increased 45.77% y-o-y.
SpiceJet’s total capacity increased to 49 aircraft from 41a year ago. The airline carried 3.48 million passengers compared to 2.85 million in the year-ago period.
As a result of the increased cost, the Ebitdar (earnings before interest, tax, depreciation, amortisation and rentals) fell 8.06% y-o-y to 484.2 crore.
This is the eighth consecutive profitable quarter for SpiceJet since its turnaround after December 2014. It recorded a load factor of 90.7%and also showcased remarkable on time performance for the quarter by clocking the highest ranking across all metros.
SpiceJet also ordered a record 205 aircraft order from American plane manufacturer Boeing and the deliveries will start by 2018.
According to Ajay Singh, the airline will be able to cut cost substantially due to 20% lower fuel burn, low acquisition cost of the aircrafts.