Loading

SpiceJet reports 2Q loss in a structurally challenged India domestic market

Negatively impacted by high fuel prices, a weakening rupee and an “irrational” pricing environment in the domestic Indian market, SpiceJet reported an INR2.4 billion (USD48.0 million) net loss and loss before tax in the three months ended 30-Sep-2011 (2QFY2012). This marked a large and negative turnaround from profits of INR101.1 million (USD2.5 million) and INR126.3 million (USD2.0 million) respectively in 2QFY2011. The record quarterly loss occurred despite a 22% increase in revenue to INR76.6 billion (USD153 million) and came amid weakening yields in the pressured domestic Indian market.

SpiceJet’s results are indicative of the Indian aviation industry as a whole, which is currently heavily unprofitable and facing considerable structure challenges. CEO Neil Mills stated “the industry as well as SpiceJet are struggling for the past 6-8 months because of high crude prices, a weak rupee and irrational pricing from one of our competitors”. In the highly-competitive, yet rapidly-expanding markets, fares are being sold below cost in recent months, while airlines’ costs bases have increased, creating significant pressures on yields and profitability.

To access CAPA Premium Analysis you need a CAPA Membership

Your window into the latest insights

CAPA employs an industry-leading Analyst team based in Europe, North America, Asia and Australia who offer unique perspectives and independent and accurate commentary of critical industry developments globally. CAPA Members rely on our Analysis to unlock valuable insights and actionable intelligence to keep ahead of the game.

Big picture strategic view

Our Analysts don’t just report the news - they take a big picture strategic view of aviation dynamics, issues and trends and analyse the implications of these developments for you.

Global intelligence

The CAPA Analyst team is based globally to ensure our CAPA Members have access to independent, unique perspectives covering an entire spectrum of daily, worldwide commercial aviation developments.

Customise your Alerts

CAPA Members can use CAPA Alerts to receive daily, weekly or monthly and customised updates on our Analysis.

I'm very impressed by the factual and detailed analysis CAPA is always doing.

- CEO, Airline Member
To learn more, contact us:
Phone: +61 2 9241 3200 | Email: membership@centreforaviation.com