Spicejet bounces back, posts Rs 102 cr net profit for Q3

Jan 21 2013, 21:20 IST
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SpiceJet earned 1.02 billion rupees ($18.95 million) in October-December. (Reuters) SpiceJet earned 1.02 billion rupees ($18.95 million) in October-December. (Reuters)
SummaryFor the quarter, carrier posted 37 per cent increase in revenue at Rs 1,603 crore.

Low-cost airline SpiceJet flew back into black with the December quarter profit jumping to Rs 102 crore, against a net loss of Rs 39.3 crore a year ago, on the back of higher revenue and stable oil prices.

As of December, the airline controlled 19.2 per cent of the domestic passenger market share, which was 16.80 per cent a year ago.

As ticket prices remained high during the quarter, the Chennai-based carrier said its average passenger yields rose a full 29 per cent, thanks partly to the grounding of its rival and once the second largest airline Kingfisher Airlines.

This brought 37 per cent revenue spike from operations to Rs 1,603 crore compared to Rs 1,173 crore a year ago.

The yields from passengers rose to Rs 4,412, up 29 per cent from Rs 3,421 a year ago, significantly boosting profit.

The news sent its shares rallying as much as 7.6 per cent on the BSE and settled today gaining 5.01 per cent at Rs 46.15.

Describing the numbers as "quite robust," Chief Executive Niel Mills told PTI that the airline focus on better revenue realisation from operations and route rationalisation helped it report healthy numbers.

Another reason is the better fleet optimisation and an altered route mix (thanks to more international flights) coupled with higher yields, fuel cost as a proportion fell to 45 per cent of the total revenue in the current quarter as against 50 per cent a year ago, Mills said.

"Also, diversification into newer markets helped us secure revenues and higher yields. The new routes netted us Rs 100 crore in revenue during the quarter," he said.

To announce a profit of Rs 102 crore for the third quarter in the current challenging environment is a huge achievement and clearly demonstrates that the strategic changes SpiceJet have made in the last two years has created a platform for our future success, Mills said.

He said the international operations contributed 7 per cent to the overall revenue basket during the quarter, and the target is to get 20 per cent of revenues within the next 18 months from international operations.

The international operations saw an 80 per cent increase in the number of passengers, while the growth in number international departures jumped 129 per cent, he said.

"Notwithstanding the all-round improvement, the fact remains that the industry continues to bear the brunt of extremely high incidence of taxation on fuel which averages at 24 per cent,

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