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Our Bureau

Plans to add more routes, break even in second year

MR SIDDHANTA SHARMA (left), Chairman, SpiceJet, and Mr Ajay Singh, Director, at a press conference in the Capital on Wednesday. - Kamal Narang

New Delhi , Aug 2

The low-cost airline SpiceJet has reported a net loss of Rs 41.42 crore during the first year of operations on a total income of Rs 453.15 crore. Income from operations and net sales stood at Rs 419.65 crore while other income for the period under review stood at Rs 33.5 crore.

Addressing a press conference after the airline took on board the year's audited results, the Chairman, Mr Siddhanta Sharma, said that the net loss was on account of a number of factors including the substantial expansion during the first year of operation, the Rs 99 promotional scheme which resulted in low yields, and high cost of fuel.

"The airline, however, has no plans of withdrawing any of the low-cost schemes that it offers. In fact there has been a month-on-month dip in our operating costs since November last year," Mr Sharma said and added that in Europe too, low-cost airlines make money only during three-to-four months of the year.

First-time flyers

During the first year the airline carried 1.6 million passengers, which was higher than the 1.2 million passengers that it expected to fly. "The year has been good for us. Almost 40 per cent or 6.4 lakh passengers that flew with us were first-time flyers," said Mr Sharma.

The airline has projected that it can break even during the second year of operations. "We may even report a marginal profit with strict cost control," said Mr Sharma. The airline has drawn up plans for further expansion of its route network by adding flights to Varanasi, Lucknow and Coimbatore during the next few months. SpiceJet plans to induct five Boeing aircraft by January 2007 and would acquire the aircraft through the leasing and buyback route.

"We have performed reasonably well. For an airline to make an operating profit during the first year of operations is a rare feat. However, we are mindful of the challenges ahead," the airline Director, Mr Ajay Singh, added.

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