SpiceJet CMD Ajay Singh hinted that a rise in airfares could improve the airline’s financials.
SpiceJet on Wednesday reported a loss of Rs 389 crore for the September quarter owing to soaring fuel costs, depreciating rupee and intense competition, which left little scope to raise domestic fares. The firm’s earnings before interest, taxes, depreciation, amortisation and rentals (Ebitdar) slipped into negative.
This the second straight quarterly loss for Spicejet. It posted a Rs38-crore loss in Q1FY19 on account of provisioning due to an arbitration award of Rs 63 crore compared with Rs 175-crore profit a year ago. The low-cost carrier had posted a profit of Rs 105 crore in the corresponding quarter of FY18.
Operating revenues for SpiceJet increased 3.8% year-on-year to Rs 1,881 crore during the September quarter, but it was offset by a 56% rise in fuel bill. It spent Rs 845 crore on aviation turbine fuel (ATF) in Q2FY19 against Rs 542 crore a year ago.
According to Indian Oil, the ATF prices were up 42% y-o-y to Rs 68,879 per kilolitre in New Delhi during Q2FY19.
Average domestic fares during the September quarter are estimated to have been lower by about 7% y-o-y owing to the keen competition among airlines. Consequently, yields remained flat at `3.56 per km during Q2FY19, down 1% y-o-y.
Market leader IndiGo slipped into losses for the first time in Q2FY19 since going public, reporting a loss of Rs 652 crore, while the crisis-hit Jet Airways posted a loss of `1,297 crore for the quarter ended September 2018.
SpiceJet CMD Ajay Singh hinted that a rise in airfares could improve the airline’s financials. “Higher fares, the fall in global crude prices and currency appreciation… we expect the operating environment to improve significantly,” he said in a statement.
The carrier flew 4.19 million passengers during the July-September period, up 3.9% y-o-y. It increased domestic capacity by 4.3% y-o-y to 3.9 billion km in the second quarter of the current fiscal. The seat occupancy or PLF on SpiceJet flights stood at 93.5% for July-September 2018 against 94.4% in Q2FY18.
Spicejet, the fourth-largest carrier by market share, commanded 12.2% of the domestic traffic at the end of the September quarter. Its shares closed at `83.7, up 2.83% on Wednesday.