In May 2019 SpiceJet turned fourteen years young and I feel extremely happy about theglorious journey we have traversed over the last fourteen years. In May 2005 when wecommenced our operations low-cost airline model was still an emerging concept in India.However we dared to dream big challenged ourselves to push beyond our limits brokeevery barrier that came our way innovated at every step and today we are proud to standas India's favourite airline. Fourteen years of flying high and ready to Spread Our Wings.
The year gone by in many ways has been a launch-pad year for SpiceJet towards itsfuture objectives. We not only successfully navigated several industry-wide disruptionsand cost head-winds to make a strong recovery in the performance but also undertookmultiple business strengthening initiatives.
The year started off on a challenging note for the Indian aviation industry. The fuelprices peaked and rupee depreciated resulting in significant increase in fuel costs andforeign exchange losses. The crises deepened further with the worldwide grounding of theBoeing 737 MAX fleet and cessation of operations of another full service carrier in Indiawhich significantly impacted the capacity in the market. Having said that the good thingis that the passenger volumes remained strong and the prospects better amidst rising percapita income and increasing shift of passengers to air travel.
Obviously these external factors impacted our performance but I am happy with theagility with which our team responded. For us the rise in fuel costs and rupeedepreciation during the year resulted in a cost escalation of Rs 6958 million and Rs2854 million respectively. This translated into a loss of Rs 4275 million in the mostcritical quarters. Despite this we posted a strong recovery in the last two quartersnarrowing down our loss to Rs 3161 million for the full FY 2018-19. This recovery wasdespite the unprecedented challenge of our thirteen Boeing 737 MAX aircraft being groundedto which we responded swiftly by inducting additional aircraft along with rationalisingand optimising the existing fleet. This just goes on to exemplify the strength of ouroperations to scale up and our unrelenting focus towards passenger services. Our effortsled to income from operations growing by
18% from Rs 77557 million in FY 2017-18 to Rs 91133 million in FY 2018-19 with acapacity increase of 14%. Alongside we continued to maintain industry leading operationalperformance on the back of on-going initiatives to enhance efficiency by upgradingtechnology hiring efficient manpower and training them. On the operational front we haveachieved a feat which is unparalleled in global aviation history. SpiceJet has flown for48 months-in-a-row with highest loads in India firmly establishing our standing as thecountry's favourite airline. In another strategic move we progressed with our aggressiveexpansion plan across both domestic and international network. As a part of internationalexpansion strategy we entered into a Memorandum of Understanding with Emirates one ofthe world's largest airline to integrate our operations through codeshare and interlinearrangements. This move will immensely benefit the passengers of both airlines and willsignificantly boost operating revenues. It will enable our passengers to enjoy seamlessconnectivity to Emirates' vast network across Europe Africa America and the Middle East.With our continued focus to expand international reach in
March 2019 SpiceJet became member of the prestigious
International Air Transport Association (IATA) making it the first low-cost carrier inIndia to join the global trade association of the airline industry representing over 290airlines. IATA membership will further enable us to inculcate global best practices andinnovations and provide our passengers with a world-class experience each and every timethey fly with us. IATA also provides us a platform to closely work and collaborate withother airline members and expand our network through codeshares and agreements withpartner airlines.
We also appointed Amadeus as our first global distribution partner that gives Amadeus'global network of travel sellers access to the airline's range of fares and prices throughthe
Amadeus Travel Platform. This is the first time SpiceJet is working with a distributionpartner to reach out to global travellers and will be able to showcase its products on aglobal scale access new markets and partners and grow its customer base.
During FY 2018-19 we have inducted 19 aircraft (including 1 Freighter) to our fleetand 13 new destinations which include 6 UDAN destinations. Today we are the largestparticipant in the regional connectivity scheme providing air connectivity to the remotestcorners of India. Flying for Everyone has always been the grand vision for SpiceJet andproviding affordable air connectivity to our fellow citizens is an achievement we are allvery proud of.
With this SpiceJet is now operational in 53 domestic and
9 international destinations. Our capacity (available seat kilometre) has expanded by14% resulting in 16% growth in passenger revenue to Rs 85784 million.
During the year we also made a breakthrough in our dedicated freighter servicesbusiness SpiceXpress commercialising operations starting with Guwahati-Hong Kong sector.We have now become the first airline in India to offer end-to-end cargo services and thefirst globally to connect North East India with South East Asia. The entry into thisbusiness exemplifies the strength of our operations in extending competencies of passengerbusiness to cargo services. It provides a whole new dimension to our operation in terms ofdiversification. We are optimistic of this business as the exponentially growinge-commerce industry in India along with rising demand for faster delivery will see thecargo volume grow manifold. We are presently operating 3 dedicated cargo freighter planesand are strongly focussed on growing this business in the coming years.
Safety remains our utmost priority and earlier in the year the airline received IATAOperational Safety Audit (IOSA) certificate the benchmark for global safety management inairlines. The IOSA certification is an endorsement of our reputation as one of the safestairlines in the world.
The financial year 2020 is going to be an exciting year for us and will be rememberedas a key milestone in the history of SpiceJet. In the first few months the airline hassuccessfully inducted thirty-five aircraft to its fleet. Nowhere in the world has anairline expanded at this pace increased capacity and added new stations and flights as
SpiceJet has done in the last few months. We successfully minimised the impact ofBoeing 737 MAX grounding and reduction of industry capacity. This would not have beenpossible without the relentless efforts of the regulators and meticulous untiring andunwavering support of each of our employees.
It has been exciting journey to lead SpiceJet from a near shutdown to being one of thefinest airlines in India. We have accomplished many unparalleled feats in the years goneby and perhaps this is the beginning of breaking new barriers as we start to Spread OurWings
|Ajay Singh |
|Chairman and Managing Director |