SpiceJet’s net profit rose by 104% year-on-year to R149 crore in the three months to June on the back of an increase in passenger load, higher capacity and efficient utilisation of aircraft, making it the sixth consecutive profitable quarter for the airline. The low cost airline made a net profit of R73 crore during the corresponding period last year.
The aviation sector has reported double digit growth for two years now but deep discounts and intense competition prevails. Nevertheless, SpiceJet reported a fairly good growth of 36.54% y-o-y in its top-line during the quarter. The carrier witnessed an increase in net sales to R1,506.36 crore compared to R1,103.23 crore in the corresponding period of the last fiscal.
The company in its BSE filing stated that, “The profits for the quarter were adversely impacted by rupee depreciation, inflation and presence of more expensive wet lease aircraft. However capacity outperformed capacity and revenue growth rates.”
“We currently do not have any wet-lease aircraft we have shifted completely to dry-lease aircraft, additionally we will be announcing our fleet expansion order in October by when we will also receive three additional Q-400s,” a SpiceJet spokesperson said.
At an operating level the EBITDAR (earning before interest, tax, depreciation, amortization and aircraft rentals) during the quarter increased by 65.04% y-o-y to R474 crore as compared to R287.19 crore in the corresponding period in FY 16. The fuel expenses of the airline increased by 11.36% y-o-y while the aircraft rentals during the quarter increased by 60.53% y-o-y.
Employee expenses also increased by 38.25% y-o-y as a result of the fresh recruitment done by the company for expanding its operations. Despite increase in expenses on the back of a modest growth in the top-line the EBITDAR margin of the airline expanded by 500 basis points to 31% when compared to 26.03% in the year ago period.
“This quarter’s results further demonstrate the impact of efforts that are being put into strengthening SpiceJet,” said Ajay Singh, chairman and managing director, SpiceJet.
What could be signs of asset deficiency the airline in its BSE filing stated “As of this date, the company’s total liabilities exceed its total assets by R88,900.2 lakhs. As on June 30, 2016, the company has accumulated losses of R248.275 lakh against shareholders funds of R159,375.4 lakh.”
SpiceJet currently operates 298 daily flights to 41 destinations, including 35 domestic and six international. The airline currently operates on these routes with a fleet of 28 Boeing 737NG and 14 Bombardier Q-400.