Tuesday, February 14, 2017

SpiceJet sees challenging year ahead as fuel prices, competition hurt; shares trade firm

The low-cost airline SpiceJet expects the current year 2017 to be challenging due to high competition and increasing global crude oil prices, its Chairman and Managing Director Ajay Singh said.
“2017 is going to be a challenging year. Fuel prices are inching up and there is competitive intensity in the market,” Ajay Singh said in an interview with CNBC TV18.
Global crude oil prices have been steadily rising since November when the OPEC countries and 11 other major producers decided to cut production in order to support prices. Brent crude futures were trading at $55.63 per barrel on Tuesday, while the US West Texas Intermediate (WTI) crude was at $52.97 per barrel.
Rising crude oil prices hurt airlines, as jet fuel makes up for the single largest part of their operating costs.
Shares of SpiceJet were trading firm at Rs 64.65, up 1.02%, ahead of its fiscal third quarter earnings due later today, where it is expected to report that its yields were under pressure because of the competition in the industry. SpiceJet competes with other low-cost airlines including IndiGo, GoAir and AirAsia, and often with full-service airlines such as Jet Airways, Air India and Vistara.
14/02/17 The Financial Express