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SpiceJet swings to profit, plans regional services next year

SpiceJet swings to profit, plans regional services next year
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First Published: Tue, Nov 02 2010. 11 33 PM IST
Updated: Tue, Nov 02 2010. 11 33 PM IST
Budget airline SpiceJet Ltd, buoyed by second-quarter profit, announced on Tuesday that it will begin regional flights next year with newly ordered planes.
The company made a profit of Rs 10 crore in the three months ended September compared with a loss of Rs 101.29 crore in the year-earlier period as passenger traffic continued to grow and helped by Rs 25.17 crore from the sale and lease-back of planes.
SpiceJet, which started international operations this year after the mandatory five years of existence, is ordering up to 30 Q400 NextGen turboprop aircraft from Canada’s Bombardier Inc. for its regional push, said the airline’s newly appointed chief executive Niel Mills.
“As part of our new vision, we believe that the enormous potential in the Indian domestic market can be further tapped by enhancing regional connectivity in the country by focusing on tier-II and tier-III cities,” Mills said.
The $450 million (Rs 5,403 crore), order for 15 Q400s with an option for 15 more follows a $2.7 billion order for 30 Boeing 737 aircraft placed by SpiceJet earlier this year. The Q400s will start joining the fleet in the middle of next year while the Boeings will start coming in 2014. In June, Sun TV founder Kalanithi Maran agreed to buy a stake in the airline through his company Kal Airways Pvt. Ltd. Maran bought a 37.7% in the carrier from US investor Wilbur Ross and Royal Holdings Services, held by the Kansagra family.
SpiceJet’s 22-aircraft fleet will rise to 28 by this fiscal end followed by the addition of 16-17 aircraft in the next fiscal year, of which at least 10 will be Q400s, the airline’s chief commercial officer Samyukth Sridharan said in a phone interview.
The airline has about 153 flights a day for a 13% share of the domestic market, which is set to rise with the addition of six Boeing 737 aircraft by March. The next three Boeing 737 aircraft will be meant for domestic routes, while the three that come after that will be used for domestic and international flights.
“We will put more flights on these routes—Kathmandu and Colombo—before any new international route launches. We have the rights for the Maldives and Dhaka and we will look at them next,” Sridharan said.
SpiceJet’s total revenue rose from Rs 450.39 crore to Rs 628.17 as it commanded better ticket rates. It fetched Rs 3,477 on average for each ticket compared with Rs 2,883 last year.
“At the end of the quarter, SpiceJet has a positive net worth and over Rs 600 crore cash,” Mills said.
Wilbur Ross representative Ranjeet Nabha ceased to be a director of the company with effect from 26 October, the airline said in a statement.
Jet Airways (India) Ltd, the country’s largest carrier by passengers, also swung to a profit in the second quarter from a loss in the year-ago period on improved seat occupancy and greater efficiency, underscoring the revival in air traffic.
The airline, which has a market share of 26.9% along with its low-fare subsidiary JetLite, reported a stand alone net profit of Rs 12.40 crore for the quarter ended 30 September against a net loss of Rs 406.69 crore in the same period last year.
SpiceJet shares rose 6% to Rs 88.15 on the Bombay Stock Exchange on Tuesday.
tarun.s@livemint.com
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First Published: Tue, Nov 02 2010. 11 33 PM IST