Spicejet sees Q2 loss, better times ahead

Low-cost carrier SpiceJet sees a loss in the September quarter, on sharply lower average ticket-prices and with one in every four seats on flights during the period staying unsold, its chief executive said on Thursday.
But improving conditions beginning in the first few weeks of the festival season would likely yield a profit in the December quarter and in the year to March, Sanjay Aggarwal told Reuters in an interview.
SpiceJet swung into a profit in the June quarter, helped by cost cuts amidst easing jet fuel prices and improving air traffic. In comparison, peers Jet Airways and Kingfisher Airlines had posted losses.
Intensifying competition had seen yields, or the average revenue from customers, plunge for SpiceJet to 2,600-2,700 rupees during the July-September quarter from 4,000 rupees seen in the prior year period, Aggarwal said.
"This quarter got killed," Aggarwal said. "It was all driven by lower yields and markets ... You look at the 35 percent drop in yields. All that means is airlines have created less revenue. The money is not coming."
With the peak season for air travel coming in, fares had started creeping up, and Aggarwal expected the carrier's yields to improve to the "low 3,000's," with load factors in the "low to mid 70s."
"In the last four weeks, yields have moved up. Demand is still kind of holding up at levels we saw last month," he said. "If everything remains as it is today and we were to forecast the quarter, I think, yes, it'll be a profitable quarter."
18/10/09 International Business Times

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Categories: SpiceJet Oct 2009