Fom the brink of bankruptcy, the country’s second largest no-frills carrier SpiceJet has bounced back to report a bottom line of Rs 71.8 crore in the three months to June. That’s a second consecutive quarter of profits and compares with a loss of Rs 124 crore in Q1FY15.
The turnaround has resulted from a confluence of several factors: lower fuel costs which fell 53.6%, a cut in capacity and a good summer holiday season. A sweet spot, which may or may not be enough to keep it going. As HSBC assessed it, the turnaround was primarily led by a 13 percentage point improvement in the load factor—the highest ever in SpiceJet’s history—and a 12% lower unit fuel costs.
Earlier this year, the Gurgaon-headquartered airline was taken over by co-founder Ajay Singh from Kalanithi Maran’s Sun Group after the government stopped the carrier from selling tickets for periods ahead. Singh agreed to arrange for a capital infusion of Rs 1500 crore of which only Rs 600 crore has come in, according to Sanjiv Kapoor, the airline’s chief operating officer.
03/08/15 Rhik Kundu/Financial Express
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The turnaround has resulted from a confluence of several factors: lower fuel costs which fell 53.6%, a cut in capacity and a good summer holiday season. A sweet spot, which may or may not be enough to keep it going. As HSBC assessed it, the turnaround was primarily led by a 13 percentage point improvement in the load factor—the highest ever in SpiceJet’s history—and a 12% lower unit fuel costs.
Earlier this year, the Gurgaon-headquartered airline was taken over by co-founder Ajay Singh from Kalanithi Maran’s Sun Group after the government stopped the carrier from selling tickets for periods ahead. Singh agreed to arrange for a capital infusion of Rs 1500 crore of which only Rs 600 crore has come in, according to Sanjiv Kapoor, the airline’s chief operating officer.
03/08/15 Rhik Kundu/Financial Express
