SpiceJet may break even next year

SpiceJet may break even next year
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First Published: Wed, Sep 03 2008. 12 51 AM IST
Updated: Wed, Sep 03 2008. 12 51 AM IST
Mumbai: India’s second biggest budget carrier, SpiceJet Ltd, may post a profit next year as it raises fares and jet fuel prices fall.
Increases in ticket prices and lower costs will also help SpiceJet narrow losses this year, Ajay Singh, a company director, said on Monday in New Delhi, where the airline is based.
Indian Oil Corp. Ltd, the nation’s largest refiner, on Monday cut the price of jet fuel by 16%, the biggest decrease this year, reducing the carrier’s largest expense.
SpiceJet, which last month won as much as $100 million (Rs443 crore today) in investment from US billionaire Wilbur Ross and Goldman Sachs, has raised fares by about 45% in the past six months to offset higher fuel costs.
“It is difficult to say whether this 16% drop in fuel prices is sufficient,” said Ashutosh Goel, a Mumbai-based analyst at Edelweiss Capital Ltd. “One needs to see where crude oil prices are going and what is the kind of slowdown in demand because of the higher fares.”
SpiceJet rose 6.63% to close at Rs29.75 in Mumbai trading on Tuesday. The stock has declined 68% so far this year.
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First Published: Wed, Sep 03 2008. 12 51 AM IST