SpiceJet may break even in third quarter

Delhi-based low-cost private carrier SpiceJet hopes to break even at an operational level and post a profit with a turnover of Rs 1,300 crore for the financial year 2007-08, according to the airline's Chairman and CEO Siddhant Sharma.

The revenues for the airline are expected to be Rs 375 crore with load factor up from 64 per cent (June-August 2007) to 78 per cent for the third quarter (September-December 2007). SpiceJet expects to fly 1.3 million passengers by the end of this financial year.

But Sharma is a little careful about the estimates, when he talks about the rising prices of jet fuel, that have seen an upsurge of about 14 per cent till December last year and then later reduced by 4 per cent.

"The only trouble we see in our posting marginal profits this year is the rising prices of the ATF. We have an advance booking of 35 per cent on our seats that have been charged at old rates," he said.

"We have adopted several measures to save fuel costs and have relied on technology such as winglets (these are wing tip extensions which reduce lift induced drag and provide some extra lift) that has helped us to save at least two to three per cent on short flights and at least three per cent on flights, that takes more than three hours," he added.

The airline has been able to generate revenues of Rs 7 crores from sale and leaseback of the aircraft over and above the base in the third quarter.

The quarter result might bring some cheer to the low-cost aviation sector, as SpiceJet has been able to keep its cost a seat a kilometer to as low as Rs 2.40 despite the rising in ATF costs.