Along expected lines, all the three listed airlines have posted losses in the recent December quarter, the fourth consecutive quarter in the red. High fuel cost (exacerbated by a weak rupee), and inability to raise fares to commensurate levels have again been the main culprits.

Of the lot, Kingfisher Airlines posted the highest loss (Rs 444 crore) compared with the loss of Rs 101 crore and Rs 39 crore reported by Jet Airways and SpiceJet respectively. Also, compared to the September 2011 quarter, while Jet and SpiceJet pared their December quarter losses significantly (between 84 and 86 per cent), Kingfisher managed only a 5 per cent reduction in losses.

Curtailed Operations

Among other factors, Kingfisher's poor show resulted from the dip in its sales (down around 12 per cent on a sequential quarter basis) due to the airline curtailing operations during the December quarter. This has resulted in an increase in the airline's expense ratios.

Although Kingfisher reduced its employee expenses and fuel cost, these costs remained higher as a proportion of sales.

Kingfisher's employee expenses as a percentage of sales grew from around 12 per cent in the September quarter to more than 13 per cent in the December quarter.

On the other hand, Jet Airways and SpiceJet grew sales by around 18 per cent and 52 per cent, thanks to robust demand. As a result, the ratio of employee expenses to sales dipped for Jet Airways (from 13 per cent to 11.4 per cent) and also for SpiceJet (from 11.4 per cent to 9.7 per cent).

Fuel costs

The script was similar in the case of fuel cost too. Kingfisher's fuel cost grew from 53.5 per cent of sales in the September quarter to 55 per cent in December. Its competitors again pared this ratio – from 47.7 per cent to 47.4 per cent in the case of Jet Airways, and from 63 per cent to 51.4 per cent for SpiceJet.

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