SpiceJet registers first profit in eight quarters

SpiceJet on Thursday flew back into black with a net profit of Rs. 22.51 crore in the January-March period.

The airline has for the first time reported profit in the fourth quarter of a fiscal since 2010.

After seven quarters of losses, budget carrier SpiceJet on Thursday flew back into black with a net profit of Rs. 22.51 crore in the January-March period of the last fiscal helped by renegotiated contracts and settlements and provisioning for re-delivery expenses among others. The airline had reported a net loss of Rs. 321.5 crore in Q4 of FY14.

The income from operations, however, declined by almost 40 per cent to Rs. 786.32 crore in the reporting quarter as compared to Rs. 1,300.75 crore in the January-March quarter of the fiscal 2013-14, the airline said in a release. The airline has for the first time reported profit in the fourth quarter of a fiscal since 2010.

“These results indicate that a recovery is in progress, and the first tangible evidence of the ongoing revival,” SpiceJet chairman Ajay Singh said. “We still have a lot of work to do. Our results show the resilience of the SpiceJet brand, and the unwavering faith, passion, and commitment of each and every employee of the airline,” he added.

SpiceJet also reported a positive EBITDA of Rs. 80 crore, against a negative Rs. 235 crore in the previous year, the airline said.

The company under the new promoter/owner has focused on restoring operational reliability and winning back customer confidence to boost revenues, while negotiating settlements and re-negotiating several major contracts to bring down costs, it said. Besides, the airline registered a healthy load factor of 81 per cent during Jan-Mar period of the previous fiscal, as it continued its strategy of demand stimulation to maximise revenues.

“SpiceJet is clearly turning the corner under the new promoter. I firmly believe this is the start of what will be a noted as a historic airline turnaround,” COO Sanjiv Kapoor said. SpiceJet survived extinction early this year following the present promoter Ajay Singh coming to its rescue with investment plan.

Mr. Singh had acquired entire 58.4 per cent from the erstwhile promoter Kalanithi Maran family’s under a revival plan, which entails an investment of Rs. 1500 crore phased manner by the new promoter.

Immediately after taking control of the airline, Mr. Singh pumped in Rs. 500 crore in the carrier and recently infused Rs. 300 crore by way of low-cost debt and trade finance.