Bogged down by demonetisation and higher fuel costs, SpiceJet on Tuesday reported a 24 per cent fall in net profit at Rs 181.1 crore in three months ended December 2016 even as the second largest low-cost carrier remained in the black for the eighth straight quarter.
The airline had posted a net profit of Rs 238.39 crore in the corresponding quarter a year ago.
The company said it could remain profitable despite a softening of demand due to demonetisation and rising fuel prices.
The airline reported operating revenue of Rs 1,642.4 crore as its seat load factor remained robust at 90.7 per cent, the highest in the industry.
"Over all, the company is doing well on all operating parameters be it the load factor, on time performance or flight cancellation rate. For 21 months now, the load factor has been above 90 per cent.
"Despite the controversy, the OTP has been highest in last six months and the cancellation rate is also the lowest.
So airline has shaped up well," SpiceJet Chairman and Managing Director Ajay Singh said.
SpiceJet has reported its eighth successive profitable quarter despite headwinds, he said adding, "Our historic aircraft order signifies the end of the turnaround phase and marks the beginning of a growth story."
Profits for the quarter were impacted by demonetisation and higher fuel prices. "Things are improving, I think the effect of demonetisation is reducing. But still there was impact of demonetisation on the international travel, especially. I think it will take another 2-3 months to come out of it," Singh added.
The aircraft order would help build an even stronger and more profitable airline, he said, adding, "We will be relentless in reducing our costs and identifying new avenues for revenue generation."
In the largest commercial aircraft deal for Boeing in the country, the Gurgaon-based SpiceJet had early this year announced it would purchase up to 205 aircraft from Boeing worth Rs 1.50 lakh crore.
During the December quarter, SpiceJet carried 3.48 million passengers as against 2.85 million flown by the carrier a year ago.
However, the fuel cost went up by 29 per cent to Rs 4,737 crore in Q3 FY17 as compared with Rs 3,666 crore in the December quarter of the previous fiscal.
"With the the new aircraft order we will significantly bring down the operating cost. Because the new aircraft burns 20 per cent less fuel. We have also reduced the acquisition cost of the aircraft besides pre-negotiating the engineering contracts (for the new aircraft)," Singh said.
Singh said that during the quarter, SpiceJet added some 20 per cent capacity, raising its fleet size to 49 planes from 41 in the December quarter of last fiscal.
Through the course of this year, the airline would again find ways to increase profitability by re-engineering its routes and refocusing on the profitable routes by adding capacity where the profits can be high, he said.
As part of this plan, SpiceJet plans to induct 7-8 leased single-aisle Boeing planes besides up to four Bombardier Q400 this year, he said.
SpiceJet also aims to increase its ancillary revenue to 20 per cent this year from the current 17 per cent, according to Singh.
By focusing hard on ancillary revenue which currently stands at 16-17 per cent. We want to push that to 20 per cent this year.
SpiceJet operates 343 daily flights to 45 destinations - 39 domestic and six international - using a fleet of 32 Boeing 737NGs and 17 Bombardier Q-400s.