New Delhi, Aug. 5: Budget carrier SpiceJet today reported a 10 per cent decline in net profit at Rs 50.55 crore for the first quarter ended June 30, 2013, compared with Rs 56.15 crore in the year-ago period.
Total income from operations, however, increased to Rs 1,704.30 crore in the April-June quarter from Rs 1,466.69 crore during the same period last year.
“Notwithstanding the several headwinds in the form of a weak rupee and high cost of fuel, the management has executed with an emphasis on efficiency, elimination of waste and profitability,” the airline said in a statement.
SpiceJet said it considered its performance as satisfactory, given the adverse business environment.
Fuel cost fell to 43 per cent of the total revenue in the current quarter against 46 per cent in the comparable quarter for the previous year, mainly because of better realisations from overseas routes that make up almost 11 per cent of the revenues.
However, currency depreciation and higher crude prices continue to exert pressure on margins.
The SpiceJet management said the airline’s share of international routes had gone up to 11 per cent during the quarter, which helped drive profitability; the domestic market’s share remained stable at 20 per cent.
The airline is hopeful of improving profitability this fiscal as the import of ATF will help to cut costs.
Besides, the airline hopes to make profits from the addition of Muscat to its itinerary.
Meanwhile, the airline has accepted the resignation of CEO Neil Mills, who had reportedly put in his papers in July.
Mills was brought on board by Maran soon after he acquired a 37.75 per cent stake in the airline in 2010.
Mills was the third CEO of the airline in the last five years and had 18 months left of his contract.
The resignation came amid reports that the airline was in advanced stages of talks with a foreign airline and other strategic investors in a bid to raise funds to cope with heightened competition.
While some Gulf-based carriers have scotched reports about investing in SpiceJet, speculation is rife that an airline from Southeast or East Asia was in talks with it.