SpiceJet to lease single-aisle aircraft

The Dollar Business Bureau

SpiceJet plans to introduce 100 narrow-body planes in the coming months as it seeks to maximise on growing demand in the Indian domestic aviation circuit.

Ajay Singh, Chairman and Managing Director of SpiceJet has assured that his airline has begun the road to recover growth with a “clean slate.” He also stated that its old financial issues stand addressed and that the airline is likely to grow in the days to come.

In the quarter ending March 2016, the airline saw a three-fold growth in its net profit, which stood at Rs.73.19 crore. Higher revenues and lower fuel cost have helped the Ajay Singh-owned airline remain profitable for straight five quarters. It took a one-time hit of Rs.173 crore for the purpose of stabilising and improving its fleet reliability during Q3, FY2016. The airline's net profit during the same quarter a year back stood at Rs 22.52 crores. 

On a happy note, the company's total income from operations grew from Rs.790.91 crore in March quarter last year to Rs 1,474.99 crore in the latest March quarter.

Singh said that discussions are on to procure more than a 100 single-aisle aircraft.

He also added that the idea of the whole process is to get his company's aircraft order right which included costs, delivery slots and also maintenance arrangement norms.

Besides that, SpiceJet is in negotiation with aircraft makers for 50 planes that it will use for regional connectivity.

Singh further added that they are adding the capacity by way of dry leasing. By the month of June, they are planning to add six dry leased aircraft.

The airline's operations have been stabilised with its on-time performance (OTP) at around 90 percent with low cancellation charges in the country.

The airline’s total expenses in March 2016 increased to Rs.1,460.39 crore from Rs.888.83 crore in the same period during the previous year.

During FY2016, net profits of SpiceJet increased to Rs.407.19 crore (against a net loss of Rs.687.05 crore in FY2015). That marked the highest ever profit in any financial year for the airline. Looks like, after IndiGo Airlines, SpiceJet too has discovered some secrets to 'happy flying success' in an environment that is seemingly hard to survive in.

Fears persist however, that if crude shoots past the $60 a barrel level, the airline's bottomline may get into trouble again.

For now though, its seems a case of SpiceJet! Set! Go!