Increasing fuel costs, rupee depreciation and economic slowdown have contributed to a nine per cent drop in SpiceJet’s net profit for the first quarter compared with the corresponding quarter previously.
The Sun Group company reported a net profit of Rs 51 crore (Rs 56 crore) for the quarter ended June 30, 2013.
Revenue increased by 19 per cent to Rs 1,688 crore (Rs 1,412 crore).
Aircraft fuel cost in the first quarter increased by nearly 10 per cent to Rs 740 crore (Rs 670 crore).
Similarly, the Chennai-based airline saw aircraft lease rentals, airport charges and airport maintenance going up during the quarter.
For the year ended March 31, 2013, the airline reported a net loss of Rs 191 crore on revenue of Rs 5,601 crore.
The company said in a press release the overall performance should be considered satisfactory and has to be viewed in the context of several adverse circumstances that continue to make the business environment for the airline industry ‘extremely challenging’.
The management has focussed on efficiency, elimination of waste and profitability.
Fuel cost dropped to 43 per cent of the total revenue during the quarter against 46 per cent in the comparable quarter for the previous year.
This is due to better realisations from overseas routes that account for almost 11 per cent of revenues.
However, currency depreciation and higher crude prices continue to exert pressure on margins, the airline said.
The average passenger yields in the quarter increased by five per cent compared with the corresponding quarter a year ago.
Domestic market share in June increased to 19.50 per cent from 18.60 per cent in the same period last year, the release said.
The airline currently operates over 350 daily flights to over 45 Indian cities and eight international destinations.
The stock price of SpiceJet remained unchanged at Rs 25.75 over the previous day’s closing price.