SpiceJet Q2 profit jumps 79% on higher bookings
New Delhi: SpiceJet Ltd’s Q2 profit rose 79% as it filled more seats and improved passenger yield.
Net profit rose to Rs105.3 crore in the quarter ended 30 September from Rs58.9 crore in the year earlier, SpiceJet said in a statement on Monday. This is SpiceJet’s highest profit reported in the second quarter since it started operations in 2005. Revenue rose 30% to Rs1,838.69 crore from Rs1,415.83 crore. Expenses increased about 28% to Rs1,734.1 crore.
SpiceJet was also able to get on average 3% more fares from passengers at Rs3,460. Flight occupancy rose to 93% in the September quarter from 91% in the year earlier.
“Even with 11 successive profitable quarters, path-breaking initiatives, record aircraft orders and exploring new growth avenues through the UDAN (regional connectivity scheme), I can say that we have just begun,” SpiceJet chairman and managing director Ajay Singh said in a statement.
Singh acquired control of the airline in 2014 from Kalanithi Maran and his associate company Kal Airways as it was on the verge of shutting down after defaulting on dues.
SpiceJet now controls about 14% of the market with a 55-plane fleet.
The airline is also set to induct new fuel-efficient Boeing Max planes from next year. The airline has about 205 of such planes on order (including options), which will be delivered over the next decade and bring down its costs by 5-10%. Many will replace its existing fleet while some will provide for expansion.
SpiceJet also placed orders for Bombardier Q400 planes this year. It has the option to add up to 50 such planes to its existing fleet of 20 regional planes.
The airline has a significant regional presence and became the first airline to introduce direct flights on routes such as Guwahati-Dibrugarh, Jaisalmer-Delhi and Jaipur-Varanasi, and Chennai-Belgaum in this quarter, it said.
Rival budget carrier IndiGo’s parent InterGlobe Aviation Ltd increased profit almost four-fold to Rs551.55 crore earlier this month, helped by credits received from manufacturers for aircraft delivery delays and grounding, besides better revenue management. The airline had reported a net profit of Rs139.85 crore in the same period a year ago. Total revenue rose 27.2% to Rs5,505.56 crore from Rs4,166.93 crore a year earlier.
IndiGo has about 38% of the domestic aviation market on a fleet of 142 planes.
On Monday, shares of SpiceJet rose 4.78% to Rs 149.10 on BSE, while the exchange’s benchmark Sensex fell 0.84% to 33,033.56 points.
IndiGo’s shares shed 0.34% to Rs 1,175.95 while Jet Airways shares gained 3.67% to Rs708.35. Jet is expected to announce its Q2 result over the coming weeks.
“I think both the airlines (Spicejet and IndiGo) are benefitting from scale and some rational pricing,” MakeMyTrip co-founder Keyur Joshi said. “However, to me international expansion and regional connectivity is a piece that can make them really successful. SpiceJet has been more bold here with routes while IndiGo is too conservative”.