SpiceJet flies into Rs 124 crore quarterly loss

SpiceJet today reported a net loss of Rs 124.10 crore for the three months ended June, mainly bogged down by higher expenses.
The no-frills carrier had a net profit of Rs 50.56 crore in the year-ago period.
In the first quarter of current fiscal, the airline saw its total income from operations slide to Rs 1,691.04 crore from Rs 1,701.54 crore recorded in the same period a year ago.
Besides, the company's expenses climbed to Rs 1,782.95 crore in the latest June quarter. In the comparable period, the same stood at Rs 1,641.93 crore.
SpiceJet also incurred "restructuring and certain one-off costs consisting of Rs 133 crore relating to restructuring of the network and fleet along with capacity rationalisation...," it said in a late evening statement.

There were also additional interest and funding costs driven by unprecedented carry-forward losses from the previous fiscal, it added.

"As a result of the above, restructuring and certain one- off costs totalling Rs 133 crore, SpiceJet reported a net loss of Rs 124 crore for the quarter ending June 2014," the statement said.
The carrier also noted that its transformation is well under way, with rationalised capacity, massive productivity improvement, increased asset utilisation and cost reduction programme, among others.
"Benefits of the intensive restructuring will become increasingly visible in the coming months," it added.
According to SpiceJet, in turn around situations that are accompained by capacity reduction, the revenue impact of reduced capacity is felt instantly.

Fixed costs associated with the previous capacity "tend to be more sticky" and take longer to take out of the system due to contractual obligations, notice periods and other such constraints, it noted.
"The restructuring and certain one-off costs of Rs 133 crore therefore needs to be viewed in this perspective," it said.