The Hindu Business Line : SpiceJet hoping for break-even this quarter

FLYING HAPPILY INTO THE THIRD YEAR: Mr Siddhanta Sharma, CEO, SpiceJet (left), with Mr Ajay Singh, Director, SpiceJet, and Mr Kamal Hingorani, Vice-President-Marketing and Planning, on the ocassion of the airlines' second anniversary, in the Capital on Tuesday. — Ramesh Sharma

New Delhi May 22 Low-cost airline SpiceJet expects to achieve break even during the first quarter of the year ending June this year, the airline Director, Mr Ajay Singh, said here on Tuesday.

"Not only has the airline managed to keep costs down, the prices of aviation turbine fuel have been relatively low.

"In addition, our on time performance has been excellent and yields (capacity utilisation) good. All this should help us report a break even during April-June this year.

"It is, however, difficult to forecast what our financial performance will be for the entire year," Mr Singh said.

In August last, during the first year of operation, the airline reported an operating profit of Rs 71.52 crore.

Boeing aircraft

The airline, which completed two years of operations on Tuesday, plans to induct eight Boeing aircraft including five Boeing 737-900 Extended Range (ER) aircraft soon.

It currently has a fleet of 11 Boeing aircraft and connects to 14 cities.

"We will be the first domestic airline to operate the Boeing 737-900 ER aircraft.

"It has the capacity to fly non-stop for four-to-five hours, which means we can use it to operate flights to the West Asia and the Far East. But these operations would depend on a change in the Government policy," Mr Singh added.

Finance

To finance the aircraft purchase various options are being examined including bank loans or tying up with leasing firms.

"The US Exim Bank is examining a proposal for financing our aircraft. "This is not usual as they do not finance aircraft unless the airline has been in the market for more than three years," the airline Chief Executive Officer, Mr Siddhanta Sharma, said.

Add-on facilities

In the next few months, the airline plans to expand its services to offer a variety of add-on facilities to the passengers, including car rental service.

"We are in talks with some agencies on hedging on fuel uplifted. We will take a decision on this soon and any financial benefit that accrues to the airline due to hedging on prices of fuel would be passed on to passengers by lowering fares," Mr Singh said.

Meanwhile, the airline denied that it was acquiring a stake in Air Deccan.

"Every one talks with each other in the industry.

"At the moment we do not have any interest in acquiring Air Deccan. There is no proposal on the table," Mr Singh said.