Sunday, August 04, 2013

Muscat route addition to boost overseas profits: SpiceJet

Low-cost carrier,  SpiceJet  , which is owned by Sun Group despite being confident of improvement in airline market continues to worry about the high aviation turbine fuel cost, which makes for almost 50 percent of total cost of the company.
SL Narayanan, Group CFO, Sun Group raised concerns about increasing crude cost and strengthening dollar, which is a double whammy for airline companies.
“Since most of fuel is anyway imported any increase in the crude prices has an immediate impact on airline profitability. Then since crude gets paid for in US dollars in any increase in dollar prices is bound to impact us,” Narayanan said.
The company had a loss of Rs 600 crore in FY12, which was narrowed down to Rs 189 crore in FY13 and it has started FY14 with a profit of around Rs 51 crore. Explaining the reason behind such a turnaround Narayanan said that primarily share of international routes has increased in overall revenue mix, consisting almost 11 percent now.  Going forward share of international routes will furthers strengthen as the company has recently added Muscat in its list of destinations.