SpiceJet flies into Rs 24-cr Q2 profit on lower expenses

New Delhi: Staying profitable for the third consecutive quarter, low-cost carrier SpiceJet Thursday reported a net profit of Rs 23.77 crore in the three months ended September driven by a steep fall in fuel costs and other expenses.

The no-frills carrier, which saw the return of its original promoter Ajay Singh at the helm earlier this year, had a net loss of Rs 310.45 crore in 2014 September quarter.

The airline has flown into the black despite its total income from operations declining over 28 percent to Rs 1,040.13 crore in July-September of the current fiscal, according to a release.

In year-ago period, the same stood at Rs 1,449.94 crore.

SpiceJet benefited from over a 57 percent drop in jet fuel bill, which fell to Rs 337.78 crore in the quarter under review. In the same period a year ago, the bill stood at Rs 787.71 crore.

Besides, it managed to bring down overall expenses in the latest September quarter to Rs 1,068.05 crore, from Rs 1,749.07 crore in the year-ago period.

"This is the third consecutive profitable quarter for SpiceJet. The airline recorded a load factor of 92.8 percent for the quarter, the highest in the industry," the release said.

In line with year-on-year capacity reduction of 34 percent that was driven by a smaller fleet in late 2014, SpiceJet said revenue for the quarter was down compared with the same period last year.

"Given that this quarter is the most challenging in the year, I am happy that the airline was able to demonstrate an encouraging performance.

"Our third consecutive profitable quarter since we embarked on the revival process shows that we are on the right track," SpiceJet CMD Ajay Singh said.

He also expressed confidence that the airline's performance would get better as it continues to focus on revenue maximisation, cost reduction and restoring operational reliability and on-time performance back to world-class standards.

On EBITDA basis, SpiceJet posted a profit of Rs 75.2 crore in the 2015 September quarter. In the comparable period, it was a loss of Rs 239.3 crore.

"On EBITDAR (earnings before interest, taxes, depreciation, amortisation and restructuring) basis, the company reported a profit of Rs 244.7 crore against a profit of Rs 20.3 crore in the same quarter last year. These results reflect a restructuring gain of Rs 65 crore and a currency re-evaluation loss of Rs 23 crore," the release said.

SpiceJet CFO Kiran Koteshwar said focus in the previous quarter was to ensure that it remained "cash positive in a traditionally weak quarter".

"We will continue to add capacity to take advantage of the strong growth in the sector, and we will work on measures to de-risk the business model," he added. 

Singh took back the reins after a major crisis had hit the company late last year.

SpiceJet is the second domestic carrier after Jet Airways to post a net profit in the latest September quarter. Jet had reported a net profit of Rs 87.59 crore in the second quarter, helped by low aviation turbine fuel prices and high passenger traffic.

According to aviation think-tank CAPA's mid-year profitability review of the Indian carriers for 2015-16, domestic airlines industry losses are expected to shrink further to USD 500-550 million, from its June estimates of USD 680-750 million.

Last month, CAPA had also projected an increased profitability for the low-cost carriers to about USD 300 million from the earlier USD 200-220 million.