Spicejet

Spicejet seems to have hit a big air pocket and is facing a lot of turbulence. After the loss of its promoter, Dayanidhi Maran in the Lok Sabha elections, it posted a set of bad numbers for Q4 and FY14. For FY14, the company posted its biggest ever net loss of Rs.1003 crore, which has jumped up 5 times over the FY13 net loss of Rs.191 crore. The company has blamed this poor performance on weak rupee and poor economic growth, which impacted demand. 75% of any airline company’s cost is affected by dollar due to the cost of fuel, thus a sharp rupee depreciation is bound to have an impact. Though the company’s net revenue had shown a rise of 12% at Rs.6351 crore, its 24% rise in expenses at Rs.7304 crore and then the increased interest cost dented the profits. What is pertinent to note is that this shocking loss was despite a 5% increase in the average air fare to Rs.4,253 from Rs.4,052 during the fiscal. Clearly, costs outstripped everything else.

The company ended Q4FY14 with an increased net loss at Rs.322 crore, up from Rs.186 crore in previous Q4and loss of Rs.173 crore in Q3. This was despite a 17% increase in passenger yields to Rs. 4,375 from Rs 3,739 during the quarter.  Fuel cost at Rs.860 crore was 10% higher YoY but sequentially, it was down 9%. Aircraft lease rentals have surged too, up 43% (YoY), up 7% (QoQ). Borrowings during the fiscal stand at Rs.1516 crore, down from Rs.1678 crore in FY13.

During the quarter, there was a 5% growth of Available Seat Kilometers, a  2% growth was seen in number of departures but what did it in, along with the fuel price is the 6% decline in number of passengers. With AirAsia also expected to enter the Indian skies soon, competition will only heat up; turbulence is expected to go up initially.