The country's third largest carrier by market share, Spicejet today said it hopes to take delivery of the first shipment of directly imported aviation fuel by early July.
"We will be the first carrier to import ATF directly, as we hope to take the delivery of the first shipment early July," Spicejet Chief Executive Neil Mills said in a post-earnings concall today.
On April 18, the director general of foreign trade, apex government authority on exports and imports, had allowed Spicejet to import aviation fuel directly, making it the first airline to get such an approval.
Early February, the government had allowed airlines to import fuel directly as part of its steps to help the bleeding airlines, which are set to close FY12 with nearly $2 billion in losses.
Mills further said the airline hopes to save considerably in fuel costs with this direct import. While Spicejet saw its fuel bills shooting up 55% in the last quarter of the past fiscal, for the full fiscal of 2012, it was still higher at 64% for the Chennai-based carrier.
On with whom the company has tied up for ATF transport, logistics and storage facilities, Mills refused to reveal the name, citing confidentiality with the partner but said they have tied up with a private company.
While refusing to give guidance for the first quarter of the current fiscal, Mills said he was "hopeful of a strong recovery this quarter" as there has been a steep fall in crude prices, from $116 barrel in the Q1 of 2012 Brent crude is trading at $106-107 to a barrel now.
"Coupled with fall in crude prices and direct import of ATF will help us save big time in fuel cost," he added.
Yesterday, Spicejet reported a four-fold jump in Q4 losses at Rs 249 crore, despite a 46% increase in sales to over Rs 1,100 crore.
The Kalanithi Maran-run carrier had reported a loss of Rs 59 crore a year-ago. On the possible impact of the steep 346% hike in airport charges in Delhi from May 1 on its bottomlines, Mills said, last fiscal the airline paid Rs 20 crore in fees to the Delhi airport operator, and added that there will be an impact on the airline's expenses with this development.
On whether the airline will completely pass on the fees hike to the passengers, Mills said, already the tickets are sold much below cost and he is forced to pass on the hike to passengers. But, he did not quantify the increase.
For the full year, the company's net loss stood at Rs 605 crore against a net profit of Rs 101 crore in FY11, while income rose to Rs 3,998 crore from Rs 2,938 crore. While net sales of Spicejet soared 46% to over Rs 1,100 crore in Q4 of last fiscal against Rs 760 crore year ago, average passenger yields, too, rose 18%.
The losses are glaring as the airline saw its passenger traffic growing a healthy 24%, outperforming the industry growth of around 16%.
Load factor also rose to 81% from was 74.4% during the same period, which helped it ramp up its market share to 17.1 in the year, from 13.6% in March 2011.
