SpiceJet and Tiger Airways back in the black


Shares in SpiceJet climbed 6% to INR88.15 yesterday, the highest closing level since 17-Jan-2008, prior to the carrier announcing its financial results for the three months ended Sep-2010 and an order for up to 30 Bombardier Q400 turboprops. The carrier's shares have gained 55% in 2010 compared with a 17% rise in the benchmark Bombay Stock Exchange Sensitive index.

  • SpiceJet's shares reach highest level in over a decade following positive financial results and aircraft order.
  • SpiceJet reports operating profit and net profit for the three months ended Sep-2010, a significant improvement from the previous year.
  • Tiger Airways returns to profitability in the three months ended Sep-2010, with increased revenues and passenger numbers.
  • Air Berlin announces strong 3Q earnings, plans to refinance convertible bonds with fixed-rate bonds.
  • Air Berlin's recent bond offer is oversubscribed, leading to a gain in share price.
  • Dart Group, Skymark, and Air Arabia experience a decline in share price despite overall market gains.

The LCC reported an operating profit of USD312,413 in the three-month period compared with USD25.4 million loss in the previous corresponding period with a net profit of USD2.3 million, a notable improvement from a USD23 million loss in the Sep-2009 quarter. Revenues strengthened 40%. SpiceJet has reported four consecutive quarterly profits as faster economic expansion and rising disposable incomes stimulates travel demand in the recovery Indian market.

Tiger profitable once again

Shares in Tiger Airways climbed 1.6% to SGD1.88 yesterday. The LCC, which is part-owned by Singapore Airlines Ltd, returned to profitability in the three months ended Sep-2010 with an operating profit of USD7.5 million compared with a loss of USD2.3 million in the Sep-2009 quarter and a net profit of USD10.9 million compared with a loss of USD1.8 million in the previous corresponding period.

The carrier reported double-digit growth in revenues, which increased 35% to USD111 million with ancillary revenues soaring 41% to USD23 million, and passenger numbers which increased 25% to 1.4 million. The carrier also witnessed 7% growth in average passenger fare to USD61.7 with RASK up 6.8% and ancillary revenue per passenger strengthening 11% to USD15.99. CASK declined 3.1% to USD 4.44 cents but increased 3.1% excluding fuel and forex to USD 2.80 cents.

Air Berlin soars on refinancing plans

Air Berlin was the day's strongest gainer, in the wake of strong 3Q earnings reports.The carrier announced on Monday net profit rose 43% year-on-year for in the latest quarter, to EUR135.9 million. The result was on a 27.4% rise in revenue, to EUR1,241 million.

Air Berlin yesterday announced it has closed its recent bond offer after it was oversubscribed on the first day of the subscription period. As part of its refinancing programme, the Berlin-based airline plans to take advantage of falling borrowing costs to refinance convertible bonds with up to EUR200 million euros of 8.5% fixed-rate bonds maturing in 2015. The convertible bonds, which have traded at an average price of about 104% of face value over the past six months, rose 6.5 cents on Monday. Shares in Air Berlin gained 6.3% yesterday.

Dart Group (-2.8%), Skymark (-2.3%) and Air Arabia (-2.1%) all lost ground during trade despite their respective bourses all gaining for the day.

Selected LCCs daily share price movements (% change): 02-Nov-2010

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