SpiceJet Q2 loss widens to Rs 389.4 crore on ATF price hike, weak rupee

NEW DELHI: Low fare SpiceJet has reported a loss of Rs 389.4 crore in the July-September, 2018, period versus a profit of Rs 105.3 crore in same quarter last fiscal. This is the airline’s second straight quarterly loss after 13 profitable quarters in a row.


“Expenses… increased by 25% on account of 48% increase in ATF (aviation turbine fuel) and 10% increase in exchange rate…. net loss of Rs 389.4 crore during July-September 2018 quarter on account of rising fuel costs and rupee depreciation,” the airline said, adding, “As an impact of strong cost pressures faced during this quarter, the company paid Rs 272 crore on account of increase in cost of ATF, Rs 78 crore on account of rupee depreciation and Rs 46 crore on account of forex losses on its obligations as compared to Q2 2017. Revenue performance remained disciplined and fell by only 1% in spite of severe competition.”

For the same reasons, the other two listed airlines, IndiGo and Jet Airways, had earlier reported Q2 loss of Rs 652 crore and Rs 1297.5 crore, respectively.

The airline’s Q2 fuel bill rose 36% to Rs 845.1 crore from Rs 542.3 crore in same period last year. Total income rose 3.8% from Rs 1,842 crore in last Q2 to Rs 1,910.3 crore this time.

SpiceJet chairman Ajay Singh said: “While it has been a challenging quarter for the entire industry, SpiceJet has managed to handle the sector headwinds well thanks to our aggressive network expansion, emphasis on cost reduction, induction of fuel efficient aircraft and the undying competitive spirit of our employees. SpiceJet has been on a spectacular growth journey and this quarter, in particular, has been very special for us. From inducting our new 737 MAX and Q400 planes to launching a dedicated air cargo service the foundation for our aggressive expansion while keeping the costs under check has been laid. With higher fares, the fall in global crude prices and currency appreciation we expect the operating environment to improve significantly.”

The airline in a statement said the new airplanes have been designed to reduce fuel and engineering costs, while cutting down on noise pollution and greenhouse gas emissions. “Driving the national agenda of UDAN (ude desh ka aam nagrik), SpiceJet, during the quarter, announced 10 new UDAN flights and started operations on the Delhi-Kanpur sector. SpiceJet now operates 25 UDAN flights on the routes of Mumbai-Porbandar, Mumbai-Kandla-Mumbai, Hyderabad-Puducherry-Hyderabad, Jaipur-Jaisalmer-Jaipur, Chennai-Hubli-Chennai, Hyderabad- Hubli- Hyderabad, Delhi- Adampur- Delhi, and Delhi -Kanpur- Delhi, Kolkata – Pakyong - Kolkata, Delhi – Kishangarh - Delhi, Pakyong – Guwahati - Pakyong, Surat – Jaisalmer – Surat, and Ahmedabad Jaisalmer Ahmedabad,” it said.