SpiceJet narrows March quarter loss to Rs 186 crore
SpiceJet said its net loss has narrowed to Rs 186 cr for the fourth quarter ended March 31, 2013 on the back of higher passenger traffic and fare hikes.
By Anindya Upadhyay, ET Bureau | Updated:
MUMBAI: Budget carrier SpiceJet posted a massive loss of Rs 186 crore for the quarter ended March 31, 2013, surprising analysts who expected the airline to break-even this quarter.
The company's net loss for the same quarter last year was at Rs 249 crore and that for the financial year ended March 31, 2013, stood narrowed down at Rs 191 crore compared with that of Rs 606 crore in the prior year.
With revenue for the fourth quarter increasing 31% to Rs 1,456 crore, average passenger yields in the March quarter rising 8% alongwith SpiceJet's aircraft occupancy increasing by two percentage points to 76% as compared to the same period last year, analysts are clueless about the dismal performance of the airline.
"Given higher air fares this quarter, absence of unfair competition like Kingfisher pulling ticket prices down, SpiceJet's increased market share and discount schemes, it beats me why the loss is so big. The business becomes unsustainable like this. I though the airline will break even and have a loss of a maximum of Rs 20-30 crore," Sharan Lillaney, analyst at brokerage firm Angel Broking said.
However, the Kalanithi Maran-owned airline attributed the losses to the continued weakness of Indian Rupee, high fuel prices and significant tax burden and said that the increase in fares was "inadequate to fully absorb the impact of higher costs of operation."
"The past twelve months have continued to be difficult and the Indian aviation industry witnessed increasing cost challenges particularly relating to airport charges as well as the adverse impact of the weakness of the rupee. We continue to be confident of the future, particularly as we have launched numerous international routes and this will improve the mix and performance in the future, " SpiceJet CEO Neil Mills said in an official statement.
The airline boasts of good operational performance with 20% growth in number of passengers, 22% growth of Available Seat Kilometers and 27% growth in number of departures, which experts think are quite in line with expectations, but fail to understand why this has not translated into better number this quarter.
The company's net loss for the same quarter last year was at Rs 249 crore and that for the financial year ended March 31, 2013, stood narrowed down at Rs 191 crore compared with that of Rs 606 crore in the prior year.
With revenue for the fourth quarter increasing 31% to Rs 1,456 crore, average passenger yields in the March quarter rising 8% alongwith SpiceJet's aircraft occupancy increasing by two percentage points to 76% as compared to the same period last year, analysts are clueless about the dismal performance of the airline.
"Given higher air fares this quarter, absence of unfair competition like Kingfisher pulling ticket prices down, SpiceJet's increased market share and discount schemes, it beats me why the loss is so big. The business becomes unsustainable like this. I though the airline will break even and have a loss of a maximum of Rs 20-30 crore," Sharan Lillaney, analyst at brokerage firm Angel Broking said.
However, the Kalanithi Maran-owned airline attributed the losses to the continued weakness of Indian Rupee, high fuel prices and significant tax burden and said that the increase in fares was "inadequate to fully absorb the impact of higher costs of operation."
"The past twelve months have continued to be difficult and the Indian aviation industry witnessed increasing cost challenges particularly relating to airport charges as well as the adverse impact of the weakness of the rupee. We continue to be confident of the future, particularly as we have launched numerous international routes and this will improve the mix and performance in the future, " SpiceJet CEO Neil Mills said in an official statement.
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The airline boasts of good operational performance with 20% growth in number of passengers, 22% growth of Available Seat Kilometers and 27% growth in number of departures, which experts think are quite in line with expectations, but fail to understand why this has not translated into better number this quarter.
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