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Low-cost airline SpiceJet on Friday has reported its highest ever consolidated net profit of ₹262.8 crore for the first quarter that ended on June 30, 2019 against a loss of ₹35.5 crore it made during the same period last year.
However, SpiceJet’s Chief Financial Officer Kiran Koteshwar believes the grounding of Boeing Max 737 and the delay in delivery has dampened their growth strategy for FY20.
The airline’s total income stood at ₹3,146 crore (₹2,254.4 crore).
According to Koteshwar, following the shut down of operations by Jet Airways, SpiceJet was quick to bridge the supply gap. “We also took premium slots that that gave us higher yields. The low fuel prices also helped us in driving up our profits.”
The Gurugram-based airline’s revenues from operation for this quarter were at ₹3,002.8 crore ( ₹2,221.5 crore), while operating expenses stood at ₹2,883.1 crore (₹2,226.5 crore). Koteshwar said that though the airline did not increase its fares due to the cap imposed by DGCA, it added more capacity to fill the gap left by Jet Airways.
The company, in a statement, said that their operations remained stressed for a large portion of this quarter due to the continued grounding of its B737 MAX aircraft. This limited its ability to take its yields up owing to passenger disruptions and re-accommodation, while simultaneously increasing its fixed costs on this category of aircraft.
“The fuel efficiency of B737 MAX was something that the company was banking on,” the CFO told BusinessLine , “however, we don’t have clarity on when can we get the aircraft and hence, I am not able to forecast the future for FY20. Our target when we started this quarter was to increase our capacity by 50-60 per cent in the absence of Jet Airways but with the Max challenge, I don’t think we will be able to get to that level.”
Ajay Singh, Chairman and Managing Director, said, “We added 32 aircraft to our fleet expanding at a pace unprecedented for a sector plagued by crisis showcasing our robust business model and proven operational capabilities.”
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