ATW Daily News

Growing SpiceJet returns to profit

Monday February 8, 2010

SpiceJet reported a company record INR1.09 billion ($23.5 million) profit in its fiscal third quarter ended Dec. 31, reversed from a INR179.6 million deficit in the year-ago period that resulted largely from a INR187.8 million charge related to a dispute with an investor.

Revenue rose 23.7% year-over-year to INR6.53 billion and an 8.5% fall in fuel costs provided an extra boost to the bottom line. Unit costs were cut 22%. Passenger numbers soared 55% on a 28% increase in available seats, lifting load factor 14 points. The Delhi-based LCC said its passenger growth compared to a 31% rise across the Indian airline industry. SpiceJet flies 19 737-800s/-900ERs.

"Consumers have displayed their confidence in our brand, product and service mix," CEO Sanjay Aggarwal said. Its market share rose 2 points year-over-year to 12.5%. "This has been possible due to better aircraft utilization. SpiceJet has consistently carried more passengers per departure than any of our competitors during this period," the airline said.

Through the first nine months of its fiscal year, it was INR340 million in the black, reversed from a INR3.45 billion deficit in the year-ago period. "If all assumptions of fuel, demand, yield and currency remain constant, SpiceJet will be able to post favorable annual results," Aggarwal said. He told the Press Trust of India that the airline intends to launch international flights once it has completed the mandatory five years of domestic service at the end of May.

Last week, Dubai World subsidiary Istithmar sold its 13.4% stake in SpiceJet for INR1.69 billion to a combination of domestic and foreign investors, according to multiple reports. DW still owns foreign currency convertible bonds worth INR560 million.

by Brian Straus

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