INDIAN budget carrier SpiceJet reported a six-fold jump in fiscal fourth-quarter profit after it settled borrowings worth US$90.8 million from Canada’s export development agency at a discount.
Net income was 1.2 billion rupees (S$19.3 million) in the three months ended Mar 31, compared with 169 million rupees a year earlier, it said on Monday (Jul 15).
The airline reported delayed results for the third and fourth quarters of the financial year ended Mar 31. Companies in India are typically reporting results for the three months to June. SpiceJet did not respond to an e-mail seeking an explanation for the delay.
Revenue fell 23 per cent to 15.7 billion rupees, while total costs fell 10 per cent. The company recognised a gain of 5.7 billion rupees after it settled borrowings from Export Development Canada for a lower amount.
The earnings come as a boost for the distressed airline, which is trying to bolster its balance sheet by cutting costs and protect its share in India’s highly competitive aviation market. The firm slashed jobs, settled disputes worth over US$50 million and raised about US$45 million in fresh capital during the quarter. It also leased 10 new planes to increase capacity ahead of the peak summer travel season.
“We are exploring opportunities to raise fresh funds to further bolster our growth plans and take advantage of the burgeoning demand in the Indian aviation market,” chairman Ajay Singh said.
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The low-cost carrier had a 5.4 per cent share of India’s air travel market in the quarter, down from 6.9 per cent a year earlier, according to data from the nation’s aviation regulator.
The carrier also reported a loss of three billion rupees for the fiscal third quarter, after delaying those results.
India’s top airlines are laying out ambitious plans to boost market share and ensure survival in a nation that’s become known for its string of failed carriers. Air India is merging with Tata and Singapore Airlines-owned Vistara, while rival IndiGo is planning a premium product to win over business travellers after grabbing over 60 per cent of India’s market.
SpiceJet shares gained 8 per cent on Monday before the results were released. BLOOMBERG
