Mumbai: Despite reporting nearly Rs 40-crore loss in the December quarter due to a 90 per cent spike in fuel costs, no-frills carrier SpiceJet on Monday ruled out increasing fares.
"We are not looking at increasing our fares now, as the market dynamics does not allow us that. Also, we are confident of improving earnings going forward, and we hope to improve our revenues further from the 41 per cent rise this quarter," SpiceJet Chief Executive Neil Mills told PTI over phone from New Delhi.
He said in the reporting quarter, the Kalanidhi Maran-run budget airline was able to raise revenue per seat by 9.5 per cent to Rs 3,812 a seat from Rs 3,482. However, this is still a hefty loss over nearly Rs 1,100 discount per seat, according to industry estimate.
Earlier in the day, SpiceJet reported a loss of Rs 39.26 crore for the December quarter due to escalating ATF prices and increase in the US dollar rates, against profit of Rs 94.44 crore for the comparable period last fiscal.
However, the airline has been able to narrow down the losses during the quarter. It had reported Rs 240-crore loss in the September quarter on the back a whopping 41 per cent spike in revenues to Rs 1,175 crore from Rs 831 crore in the corresponding quarter a year ago.
Terming the numbers "a lot better-than-expected," Mills said "we beat industry growth with 29 per cent rise in passenger growth outperforming the domestic industry passenger growth of around 16 per cent."
He attributed the lower losses to "major gains in market share, improving the revenue mix and achieving significant cost savings aided by a relentless drive to boost operational efficiencies."
"During the December quarter, we were able to realise major gains in market share, improve the revenue mix and achieve significant cost savings aided by a relentless drive to boost operational efficiencies. Accordingly, our PBT losses fell by over Rs 200 crore compared with the immediately preceding quarter.
"But for escalating ATF prices and abnormal increase in the US dollar rates the financial performance could have been much better this quarter," Mills said.
The company said aircraft fuel expenses were 90 per cent higher than the same period last year and fuel cost as a proportion constituted 50 per cent of the total revenue in the current quarter compared to 37 percent a year ago.
"Increased cost of crude oil plus 24 per cent tax on ATF continues to impact the civil aviation sector very adversely," he said.
However, the outlook is considerably better now with recent media reports indicating a liberalisation of FDI in the sector, the SpiceJet CEO said.
Asked whether the airline will be interested in importing ATF directly if allowed, Mills answered in the positive, but refused to put a number to the possible savings, saying the management is yet to fully assess it.
The airline's market share in December rose to 16.8 per cent from 13.6 percent in September, the largest growth of any domestic carrier, he said.
Mills said the airline will continue to maintain growth rate in terms of fleet additions, passenger traffic and destinations going forward.
SpiceJet operates 264 flights daily to 32 domestic cities and two international destinations - Kathmandu and Colombo.