August 31, 2008
Low-cost Indian carrier SpiceJet posted a quarterly loss, hurt by a more than 61 percent jump in domestic jet fuel prices, but said capacity reduction and softening crude oil will result in better revenue realization.
Indian airline industry has fallen on hard times as monthly fare increases have resulted in a fall in passenger traffic leading to industry-wide capacity reduction.
India has set up a committee to recommend measures to help the domestic airline sector deal with losses that may double to nearly USD$2 billion in 2008/09.
SpiceJet, which has a tenth of India's domestic airline market, reported April-June quarter net loss of INR1.02 billion rupees. It excludes a loss of INR272 million on account of restatement of forex debt, it said in a statement.
It did not provide year ago numbers.
Operating revenue for the quarter rose more than 72 percent to INR4.57 billion.
"SpiceJet has curtailed its capacity increase foreseeing a subsequent impact of decline in passengers for the current year," Partha Sarathi Basu, chief financial officer said.
SpiceJet expects industry wide capacity reduction will reduce the demand-supply mismatch and help it realize better revenues going forward, it said.
A 22 percent drop in oil prices since mid-July would contribute towards a more stable industry scenario and help the market to mature, Chief Commercial Officer Samyukth Sridharan said.
(Reuters)