Low-cost airline SpiceJet Ltd. posted a second quarter net loss of ₹389.4 crore for the period ended September 30, 2018 on account of fuel price increase, rupee depreciation and lower fares.
The firm had posted a net profit of ₹105 crore in the year-earlier period. SpiceJet had been recording high seat load factor for the past 42 months. Total income of the firm was ₹1,910.3 crore for the reported quarter as against ₹1,842 crore in the same quarter last year.
Expenses per available seat kilometer (ASKM) increased 25% on account of a 48% increase in ATF prices and 10% increase in exchange rate, the airline 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,” said Ajay Singh, CMDChairman and Managing Director, SpiceJet.
CAPA had estimated estimates Q2 FY19 loss of SpiceJet at ₹350-400 crore which was in line with the larger industry trends.
“The Q3 results are key for full year estimates at this stage. CAPA continues to expect break-even to a modest loss for FY19 for LCCs (low cost carriers), including Spicejet but the range of losses [are] largely variable as of now,” said Kapil Kaul, CEO, South Asia, CAPA.
“Spicejet is well placed to manage profitability challenges especially as SLB (sale and lease back) incentives kick-in from H2 FY 19 but near-term market conditions and unrelated diversification indicate risks,” he said.
He said for SpiceJet raising capital may become imperative if H2 FY 19 doesn’t reverse trends significantly.