29-Oct-2009 2:00 PM

INDIA AIRLINE EARNINGS WRAP: Kingfisher and SpiceJet report losses; Jet Airways losses widen

Kingfisher Airlines, India’s largest airline by market share, reported a narrowing in net losses to USD89 million in the three months ended Sep-2009 (2QFY2010), due to lower fuel and staff costs (-42% and -18%, respectively). It was still a hefty loss and reflects a 12% decline in revenue in the quarter. Similarly, the country’s second largest LCC by market share, SpiceJet, reported a narrowed its net loss to USD22 million, from a USD42 million net loss in the previous corresponding period.

India’s largest airline by market share continues to increase domestic dominance

Kingfisher continued to gain market share in the quarter, with passenger numbers up 9% year-on-year in the quarter, despite a 17% domestic capacity (ASKs) contraction. The carrier remains the domestic market leader, with high double-digit passenger growth in the quarter, for a 23% market share in Sep-2009.

Indian carriers domestic market share in Sep-2009

Kingfisher domestic passenger numbers and domestic passenger number growth: 2Q07 to 3Q09

Kingfisher expected improved financial performance in current quarter

Looking forward, Kingfisher stated it expects to improve its financial performance in the current peak quarter (3Q2010), adding, that it “expects to show higher guest numbers and much stronger yields in the third quarter".

SpiceJet also reports a narrowed net loss

During 2QFY2010, SpiceJet reported a narrowed net loss to USD22 million (from a USD42 million net loss in the previously corresponding period), for a net loss margin of 22.6%, as revenues increased 27% in the quarter.

Spicejet operating profit margin and net profit margin: 4QFY2008 to 2QFY2011

SpiceJet expects breakeven result in the full year

The carrier stated it expects to break even in the 12 months ending Mar-2010, if oil prices and rupee-dollar exchange rates remain stable, with CEO, Sanjay Aggarwal, stating that the carrier now has a “very good balance of demand and the fares in the market”.

Yield starting to firm up: SpiceJet

Mr Aggarwal added that yields have "started firming up during the third quarter and demand remains robust", adding, “we expect this trend to continue through the next quarter."

SpiceJet domestic passenger numbers and domestic passenger number growth: 2Q07 to 3Q09

Separately, SpiceJet stated it may raise as much as USD50 million through a share sale, to fund expansion and the launch of international operations, which the carrier is eligible to commence in mid-2010.

Jet Airways losses widen

While Kingfisher and SpiceJet reported improved results in the quarter, Jet Airways reported its largest quarterly loss in more than four years (the carrier’s net loss increased 6% to USD85 million). See related article: EARNINGS WRAP: Jet Airways' losses widen; China's 'Big Three’ return to the black

SpiceJet, Jet Airways and Kingfisher shares outpace benchmark index in 2009

SpiceJet’s shares gained 4% yesterday, while Kingfisher’s shares were down 0.1%, upon the release of the carriers financial results.

SpiceJet’s shares have more than doubled since the start of 2009, compared with a 69% gain in the benchmark Sensex index of the Bombay Stock Exchange. Jet Airways' and Kingfisher’s share prices have also exceeded the benchmark index in 2009, although to a lesser degree.

Spicejet, Jet Airways & Kingfisher airlines share price index: Jan-2009 to Oct-2009