SpiceJet’s loss narrows, helped by Kingfisher woes

NEW DELHI Tue Nov 13, 2012 12:12am IST

A SpiceJet Boeing 737-800 aircraft is parked on the tarmac at Rajiv Gandhi International Airport in Hyderabad March 7, 2012. REUTERS/Vivek Prakash/Files

A SpiceJet Boeing 737-800 aircraft is parked on the tarmac at Rajiv Gandhi International Airport in Hyderabad March 7, 2012.

Credit: Reuters/Vivek Prakash/Files

Stocks

   

NEW DELHI (Reuters) - SpiceJet, India's second-biggest budget carrier by market share, reduced its second-quarter losses by 32 percent, benefiting from massive cuts in capacity by rival Kingfisher Airlines.

The losses still reflect the fiercely competitive aviation industry, which lost a combined $2 billion last year. All but unlisted IndiGo lost money, hurt by high state taxes on jet fuel, expensive airports and regulatory uncertainty.

"Fuel costs and a weakened INR continue to be a cause of worry for the aviation sector," SpiceJet Chief Executive Neil Mills said in a statement.

Kingfisher has stopped flying since having its licence suspended last month because of safety concerns. Even before then the carrier operated only about a fifth of its aircraft, enabling rivals to push up fares.

SpiceJet said it lost 1.64 billion rupees in the three months to September 30, compared with a forecast loss of 961 million rupees and after a 2.4 billion rupee loss in the same period last year.

Accumulated losses were more than the company's net worth at September 30, its auditors said on Monday.

A SpiceJet spokeswoman was not immediately available to comment.

Operational revenue jumped 57 percent in a quarter that is relatively lean because Indians tend to fly more during the festive season that begins in October. Passenger yields jumped 37 percent, reflecting a big increase in air fares.

Jet Airway, India's biggest airline, this month beat estimates with an 86 percent reduction in its second-quarter losses thanks to a jump in operating income.

SpiceJet is widely seen as a potential target for foreign carriers looking to invest in India after the government relaxed takeover rules this year.

The airline has said that it was in preliminary talks with cash-rich Gulf carriers for a potential investment.

The company's shares closed the day 2.68 percent higher at 36.35 rupees, having gained more than 50 percent in the past 12 months. By contrast, shares of AirAsia, Asia's largest budget carrier, have lost 23.4 percent in the same period.

(Reporting by Anurag Kotoky; Editing by Muralikumar Anantharaman and David Goodman)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Jan Dhan Yojana

REUTERS SHOWCASE

Japan Trip

Japan Trip

Modi eyes breakthrough nuclear pact on Japan trip.  Full Article 

Chance For Reform

Chance For Reform

India's coal crunch - a chance to revamp, reallocate and revive.  Full Article 

E-Commerce

E-Commerce

Ratan Tata invests in online retailer Snapdeal.  Full Article 

Top Priority

Top Priority

Finance minister says food inflation is top priority.  Full Article 

Deal Talk

Deal Talk

Who wants to buy Snapchat? Microsoft, Google, Apple, Alibaba.  Video 

Fresh Funding

Fresh Funding

Tiger Global leads $65 million funding in Indian messaging app Hike.  Full Article 

GDP Preview

GDP Preview

Economy likely grew faster in June quarter: Reuters poll.  Full Article 

Safety Net

Safety Net

SEBI revamps trading safety-net rules.  Full Article 

Fraud Investigation

Fraud Investigation

IMF's Lagarde put under investigation in French fraud case.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage