New Delhi: SpiceJet, India's second-biggest budget carrier by market share, reduced its second-quarter losses by 32 per cent, 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 per cent 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 per cent, reflecting a big increase in air fares.
Jet Airway, India's biggest airline, this month beat estimates with an 86 per cent 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 per cent higher at 36.35 rupees, having gained more than 50 per cent in the past 12 months. By contrast, shares of AirAsia, Asia's largest budget carrier, have lost 23.4 per cent in the same period.