Hit by rising fuel prices, SpiceJet today posted a net loss of Rs 59 crore for the fourth quarter of financial year 2010-11. The company had reported a net profit of Rs 27 crore during the corresponding period last year.
However, the airline made annual profit for the second consecutive year, as the net profit this financial year jumped by 64.6 per cent to Rs 101 crore, compared to a net profit of Rs 61.44 crore last year.
The company also registered strong growth in revenues during both the fourth quarter and whole financial year. In the fourth quarter, total income of the company grew by 32.51 per cent to Rs 758 crore. While in the financial year, it rose by over 33 per cent to Rs 2,934.38 crore.
“One of the reasons that hit our financials during the quarter was fuel costs, which earlier used to account for 40 per cent of our operating cost but has now increased to 50 per cent of the total costs,” SpiceJet CEO Neil Mills said. The airline, in terms of passenger growth, outperformed the industry during the year with a 30 per cent growth in passenger number, while industry average was 19 per cent.
But the company feels that the coming quarters will be tough because of fuel prices and no pricing discipline followed by a few airline. “When pricing policy is violated by an airline to gain passengers, it ultimately impacts the industry’s fares and the airlines margins,” Mills said.
He added that rising fuel price is a major concern and needs to be watched. “We want the fuel prices to be stable at the current level, if it does not come down from the current level,” he added.