SpiceJet posts Rs 72 cr quarterly profit on lower expenses

Budget carrier SpiceJet, which was on the verge of closure late last year, today posted its second straight quarterly profit at Rs 71.8 crore in the three months ended June on lower expenses and higher seat occupancy.
Announcing its quarterly earnings, the Gurgaon-based airline also said it plans to buy new aircraft for fleet expansion. The low-cost carrier had posted a net loss of Rs 124.1 crore in the 2014 April-June quarter.
"We intend to place orders for new aircraft during this financial year and it would be an outright purchase. However, we have not yet decided what type of aircraft we should go for but the decision will be based on the commercial interest of the airline," SpiceJet chairman Ajay Singh said.

Currently, SpiceJet has 34 aircraft in the fleet, comprising 18 Boeing 737s, two Airbus A319 (on wet lease) and 14 Bombardier Q400.
Singh said the airline would continue to lease more aircraft till the new ones are delivered. "We have plans to induct 3-4 more planes for the winter schedule."
The latest quarterly net profit would have been higher but for the wet-lease of aircraft during last three months.

Snapping seven-straight quarters of loss, the budget carrier had returned to the black with a Rs 22.1 crore net profit in the three months ended March, 2015 after original promoter Ajay Singh took control.

"We are working hard to build a world class airline again... This is the second consecutive profitable quarter and I am proud of what we have achieved. But there is still a long way to go," Singh said.
"The profit that we have posted is pure operating profit but it shows we are on the right track," he said.
However, SpiceJet's sales from operations declined by 34 per cent to Rs 1,106.3 crore in the first quarter of current fiscal. In year-ago period, it stood at Rs 1,691.04 crore.
The airline, however, justified the sharp decline in sales to reduction in capacity.

In line with year-on-year capacity reduction of 33 per cent that was driven by fleet reductions in late 2014, the airline's revenue for the latest June quarter was down 34 per cent compared to the year-ago period.
"We have been able to manage the total revenue of the planes that we are flying to keep it at the same level, Moreover, our total yield has also been the same as the load factor has increased in proportion to the drop in fares," Singh said.
Profit in the first quarter of current fiscal "was slightly suppressed due its wet-lease operations which are by nature more expensive than conventional leases, and by a weaker rupee relative to previous year", the carrier said.