Budget carrier SpiceJet has reported a 24.50 per cent year-on-year decline in its net profit to INR 181.14 crore in the October-December quarter as a result of demonetisation, which resulted in reduced contribution from the international routes, capacity addition and increasing cost like rentals, fuel charges and other expenses.
Revenue or net sales increased 11.34 per cent y-o-y to INR 1,602.66 crore on the back of increased domestic travel during the Diwali and Christmas holiday period, but international revenues were under pressure. International routes contribute almost 25 per cent to the total revenues of the airline.
“The impact of demonetisation is still there, but I think we have performed really well given the circumstances. It will still take another two to three months for the demand to come back. We are trying to focus on the profitable routes to maintain profitability,” said Ajay Singh, chairman, SpiceJet.
In terms of the cost, the jet fuel expenses which constitute almost 40 per cent of the total operating cost, increased 29.22 per cent y-o-y to INR 473.77 crore. While rentals increased 5.87 per cent y-o-y and the same for other expenses increased 45.77 per cent y-o-y.
Th airline’s total capacity increased to 49 aircraft from 41 a year ago, and carried 3.48 million passengers compared to 2.85 million in the year-ago period.
As a result of the increased cost, the EBITDAR (earnings before interest, tax, depreciation, amortisation and rentals) plunged 8.06 per cent y-o-y to INR 484.2 crore.
This is the eighth consecutive profitable quarter for SpiceJet since its turnaround after December 2014. It recorded a load factor of 90.7 per cent and also clocked the highest on-time performance (OTP) rating across all metros.
SpiceJet also ordered a record 205 aircraft order from Boeing and the deliveries will start by 2018.
According to Singh, the airline will be able to cut cost substantially due to 20 per cent lower fuel burn and low acquisition cost of the aircraft.
