Two-year-old, low-fare carrier SpiceJet Ltd said it expected to be profitable next fiscal year and hopes to end fiscal 2008 with a net loss of between $10 million (Rs395 crore) and $12 million.
The airline, reporting its results for the quarter ended December, announced a total income of Rs438 crore with a operational profit of Rs4 lakh compared with an operational loss of Rs25.93 crore in the same period last year.
“We expect a small profit in the next fiscal (2008-09),” said SpiceJet’s executive chairman Siddhanta Sharma.
Flight plan: A SpiceJet Airbus. The company intends placing orders for 10 more Boeing 737-800 aircrafts for deliveries starting 2011. (Photo: Ramesh Pathania/ Mint)
The Gurgaon-based company has in the past said it will make a profit in the current fiscal year.
Sharma said SpiceJet will place orders for another 10 Boeing 737-800 aircraft for deliveries starting 2011 through 2013 but would not avail of options to buy same number of planes.
“We are not taking any options at this time,” he said, adding the reason for departure from the normal practice was to do with the fact that slots for aircraft were available only after 2014.
At sticker prices, normally higher than the discounted price at which they finally sell at, these aircraft would cost the airline nearly $620 million.
The total size of the SpiceJet’s fleet will end at 17 this fiscal and 23 next fiscal going up to 40 with the last delivery by 2013.
Siddhartha Khemka, an analyst with Mumbai-based ICICI Direct, said the orders restrain was a sign that the company is looking at profitable growth instead of market share and the third quarter results reflect that the airline has been able to keep costs under control despite fuel price hikes.
Increasing fuel prices had resulted in the cost per average seat km or ASKM, a measure of an airline’s costs, for the carrier increasing to Rs2.52 from Rs2.36 in the last quarter.
The airline company’s market share has moved up from 6.9% in 2006 to 8.8% in 2007 with 110 flights daily connecting over a dozen cities.