SpiceJet profit crashes 24% on note ban, rising fuel prices

Low-cost carrier recorded a 24 per cent decline in net profit, at Rs 181.1 crore, in the quarter-ended December, from Rs 239.9 crore in the year-ago period.


The airline attributed it to the softening of demand due to demonetisation.


The airline’s total income from operations was Rs 1,642.4 crore, higher than Rs 1,460 crore earned during the same period last year. However, fuel cost increased to Rs 473.7 crore in the quarter against Rs 366.6 crore in the year-ago period.


Rising oil prices have started denting the profitability of Indian carriers.


Jet Airways reported a net of Rs 142.4 crore in the quarter ended December — down 70 per cent from Rs 467.1 crore in the year-ago period.


The airline’s CMD Ajay Singh said that minus the impact of demonetisation, the airline performed well in all aspects.


“There is a clear differentiation in the product from the time we took it over two years ago. Back then, on-time performance was less than 50 per cent and cancellation rate was high. Two years later, we are now in a situation where we have highest passenger load factor. The airline has shaped up well,” Singh said.


Expenses rose to Rs 1,520 crore, against Rs 1,209.2 crore in the year-ago period — an increase of 25 per cent. This was mainly due to the creeping fuel cost which increased to Rs 473.7 crore in the quarter against Rs 366.6 crore in the year-ago period.


Singh said going ahead, the new aircraft order will help the airline to bring down cost significantly. “The new planes will significantly bring down cost of operations as the fleet will become superior. The new aircraft burns 20 per cent less fuel. Engineering cost will see a significant decline. Those contracts are being renegotiated. Financing cost of the aircraft will be less as well,” he said.