SpiceJet flies back into the black
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Indian low-cost carrier SpiceJet, which was on the verge of collapse last year, has surged back to profit in the first quarter of its 2015-16 financial year.
The Delhi-based airline was forced to ground aircraft and slash routes as part of a major cost-cutting drive in late 2014. But the company’s fortunes have since been turned around, resulting in net profit of INR718 million (US$11.2m) for the three months ending 30 June 2015.
This marks an improvement of INR1.96 billion compared to the INR1.24bn net loss SpiceJet suffered in the same period last year.
The company’s revenues totalled INR11.06bn, which was 42% less than the same period last year, owning to SpiceJet’s reduced operations. Seat capacity has been cut by 33% in the last 12 months, but this did help SpiceJet record an impressive average load factor of 89.8% – 15% higher than the same period last year. The airline’s cost per available seat kilometre fell by 13%.
“We are working hard to build a world class airline again. These results show that we are on the right path,” said Ajay Singh, chairman of SpiceJet. “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.
“I am confident that the best is still ahead of us. We will continue to focus on growth and on getting operational reliability and on-time performance back to world class standards. We need to strengthen SpiceJet so that it is able to take advantage of the enormous opportunities that will come its way in the coming years,” he added.
SpiceJet also emphasised that it is “no longer under financial stress”. The company has recently started reintroducing aircraft and routes, and now operates 250 daily flights to 41 destinations, including seven international hubs.
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