On the path to revival, SpiceJet has managed to slash its debt burden by nearly Rs 1,200 crore to Rs 800 crore in the last one year, according to the airline’s chief Ajay Singh.
Singh, who took over the reins of then crisis-hit SpiceJet early last year, said the turnaround process has taken off “very well”. Riding on the back of four straight quarters of profit, SpiceJet is slowly moving from consolidation to expansion path and is preparing to trim costs in the long term.
“The airline has cut down its debt burden by Rs 1,200 crore to Rs 800 crore in the last one year. The amount stood at around Rs 2,000 crore a year ago,” he told PTI. The chairman and managing director of the carrier emphasised that there is enough positive cash flow now. “In terms of capital expenditure, the airline is comfortably placed,” he added.
Under the revival plan, Singh has so far infused equity worth Rs 800 crore. Citing SpiceJet’s good show in the 2015 December quarter, where it posted Rs 238.40 crore profit, Singh asserted that the carrier is “climbing out of problems”.
Despite a reduction in fares during the 2015 December quarter, the unit revenue rose in the same period, he added. The highest-ever quarterly profit of Rs 238.40 crore in the latest December quarter came mainly on the back of nearly 35% fall in fuel prices.
“It was not just decline in fuel prices, the revenues also increased in the last quarter. The occupancy levels are on the rise and our planes are now much fuller,” he noted. Total income from operations jumped to Rs 1,459.95 crore in the latest December quarter compared with Rs 1,311.18 crore in the year-ago period. It recorded a load factor of 91.6% for the quarter, the highest in the industry.
Referring to the changes in the past one year, Singh said the airline has done away with the practice of “indiscriminate sale of tickets” as was seen in the past.
SpiceJet was known for coming out with flash sales, whereby tickets were offered at highly discounted prices, and the practice was very frequent under the ownership of the Marans. “We have not been doing indiscriminate sale of tickets. We are now much more careful and selective,” Singh noted.