(Reuters) - Higher passenger yields for Indian low-cost carrier SpiceJet in its third quarter only partially offset higher crude oil prices and foreign-exchange losses that resulted in a sharp drop in profit.
Though profit plunged by 77 percent after a 34 percent jump in oil prices and 11 percent depreciation of the rupee against the dollar sent, shares in the company closed 2.4 percent up on the 8 percent increase in passenger yields - a measure of fares and distance flown - and hopes of more stable crude prices.
The airline’s standalone net profit, which excludes results of its SpiceJet Merchandise and SpiceJet Technic businesses, fell to 550.7 million rupees ($7.74 million) for the last three months of 2018 from 2.4 billion rupees a year earlier, the airline said.
SpiceJet, India's fourth-largest airline by market share, and rival IndiGo are seeing signs of recovery in an intensely competitive market in which profitability has been squeezed further by an intense price war. (Graphic: India's biggest airline by market share tmsnrt.rs/2S3rKqG)
IndiGo, owned by InterGlobe Aviation, last month reported a 3.7 percent rise in passenger yield for the same quarter.
With oil prices easing and SpiceJet adding the fuel-efficient Boeing 737 MAX aircraft to its fleet, “the outlook looks stronger than it has over the past year”, Chairman and Managing Director Ajay Singh said in the statement.
SpiceJet’s average fares rose 25 percent from the previous quarter despite a 16 percent rise in capacity in terms of seat kilometers.
($1 = 71.1625 Indian rupees)
Reporting by Tanvi Mehta in Bengaluru and Aditi Shah in New Delhi; Editing by David Goodman