SpiceJet posts worst quarterly loss of Rs 559 cr, blames weak rupee

Mumbai: Low-cost carrier SpiceJet today reported a record loss of Rs 559 crore in the three months to September, hit by high fuel prices and a weak rupee.

The airline, controlled by media baron Kalanithi Maran’s Sun Group, had reported a loss of Rs 164 crore in the year-ago period. The airline’s previous biggest loss was Rs 327 crore in the September quarter of FY 2007-08.

[caption id=“attachment_1217695” align=“alignleft” width=“380”] Spicejet planes. AFP.[/caption]

The airline, which has been headless since late July after CEO Niel Mills quit, in a late night media statement said its income rose marginally to Rs 1,246.08 crore from Rs 1,172.97 crore in the year-ago period.

The finance cost rose to Rs 32.72 crore during the July-September quarter from Rs 30.67 crore in the same period of last fiscal.

The airline attributed the record high loss to higher fuel prices, which accounted for 56 per cent of the total operational expenses, up from 54 per cent in the year-ago quarter. A weakening rupee against the US dollar, coupled with a massive spike in aircraft maintenance cost that jumped to Rs 78 crore in the reporting period added to the airline’s woes.

India’s fourth-biggest airline by domestic market share and controlled by billionaire Kalanithi Maran’s Sun Group, added two more international routes last quarter, taking the total to 10.

“While these initiatives add to the pressure on margins due to the start-up costs involved in setting up a new station, the contributions from overseas flying will help in reducing costs through a better utilisation of the fleet,” SpiceJet said in a statement.

The company said it did not pay any tax in the reporting quarter against Rs 6.3 crore it had paid in year-ago period. The fourth largest operator by market share had short-term debt of Rs 255 crore.

While the passenger traffic for the airline increased by nine per cent during the reported period, passenger yields declined 7 per cent to Rs 3,711 from Rs 4001 a year ago. Late last month, the second largest carrier Jet Airways had also reported a record quarterly loss of Rs 891 crore, an eight-fold rise from the year-ago period.

Ailing Airlines

Market leader IndiGo apart, all four of India’s other airlines are money-losing. Kingfisher Airlines (KING.NS), once India’s second-biggest carrier, has not flown in a year for want of cash and has had little success so far in its bid to revive operations.

SpiceJet’s auditor said in the company’s annual report as of end-March that the company’s ability to remain a “going concern” depended on establishing profitable operations and raising funds.

SpiceJet has been without a chief executive since announcing Neil Mills’ resignation in early August but the company recently appointed Sanjiv Kapoor, a former Northwest Airlines and Temasek executive, as its chief operating officer.

Last month Jet Airways, the only other listed Indian carrier that is operational, also reported a record quarterly loss for the three months ended September 30.

Shares in SpiceJet, valued at about $170 million, closed 1 percent down at 19.90 rupees before the results were announced, while the local market index was down 0.5 percent.

Agencies