Spicejet bounces back, posts Rs 102 cr net profit for Q3

New Delhi: Low-cost airline SpiceJet flew back into black with the December quarter profit jumping to Rs 102 crore, against a net loss of Rs 39.3 crore a year ago, on the back of higher revenue and stable oil prices.
As of December, the airline controlled 19.2 per cent of the domestic passenger market share, which was 16.80 per cent a year ago.
As ticket prices remained high during the quarter, the Chennai-based carrier said its average passenger yields rose a full 29 per cent, thanks partly to the grounding of its rival and once the second largest airline Kingfisher Airlines.
This brought 37 per cent revenue spike from operations to Rs 1,603 crore compared to Rs 1,173 crore a year ago.
The yields from passengers rose to Rs 4,412, up 29 per cent from Rs 3,421 a year ago, significantly boosting profit.
The news sent its shares rallying as much as 7.6 per cent on the BSE and settled today gaining 5.01 per cent at Rs 46.15.
Describing the numbers as "quite robust," Chief Executive Niel Mills told PTI that the airline focus on better revenue realisation from operations and route rationalisation helped it report healthy numbers.
Another reason is the better fleet optimisation and an altered route mix (thanks to more international flights) coupled with higher yields, fuel cost as a proportion fell to 45 per cent of the total revenue in the current quarter as against 50 per cent a year ago, Mills said.
"Also, diversification into newer markets helped us secure revenues and higher yields. The new routes netted us Rs 100 crore in revenue during the quarter," he said.
To announce a profit of Rs 102 crore for the third quarter in the current challenging environment is a huge achievement and clearly demonstrates that the strategic changes SpiceJet have made in the last two years has created a platform for our future success, Mills said.
He said the international operations contributed 7 per cent to the overall revenue basket during the quarter, and the target is to get 20 per cent of revenues within the next 18 months from international operations.
The international operations saw an 80 per cent increase in the number of passengers, while the growth in number international departures jumped 129 per cent, he said.
"Notwithstanding the all-round improvement, the fact remains that the industry continues to bear the brunt of extremely high incidence of taxation on fuel which averages at 24 per cent, making it among the highest in the world and acts as the biggest hurdle for the industry's long-term profitability," Mills warned.
During the quarter, the airline recorded 7 per cent growth in number of passengers, while the growth of available seat kilometres rose 18 per cent and the number of departures grew a full 25 per cent.
Its regional operations recorded an 82 per cent growth in the number of passengers, while the departures posted a higher 89 per cent growth.
On revenue from the last week's ultra-low fare scheme, Mills said, they sold 7,05,000 tickets in three days but refused to share the revenue. But, it has been learned that the airline netted a huge Rs 165 crore.
Describing the promo as a tactical one, Mills said he is looking at garnering 20 per cent ticket sales through such promotions.
When sought his fuel outlook, he said it still is a big challenge and in a country like ours every airline has to live with this.
On the much-delayed ATF import, for which SpiceJet was the first to secure a licence last April, Mills said he has been waiting for the past six months or so to clear one last bureaucratic hurdle.
"As and when this one bureaucratic issue is resolved, I can start shipping in ATF from the very next day, as I have all the commercial arrangements, like vendors, shippers, storage facilities, etc already in place," Mills said.
However, Mills did not name any of the partners and the government department where the issue has got stalled.
SpiceJet currently operates over 330 daily flights to 42 domestic cities and seven international destinations -- Dubai, Colombo, Guangzhou, Kabul, Kathmandu, Male and Riyadh.
http://www.financialexpress.com/news/spicejet-bounces-back-posts-rs-102-cr-net-profit-for-q3/1062490/0

Pilots seek winding up of KFA to get dues

Pilots seek winding up of KFA to get dues

NEW DELHI: Pilots of grounded Kingfisher have served a legal notice on the airline for winding up the company to enable recovery of their dues. The company now has three weeks for clearing salary dues, failing which these exemployees will file a petition for winding up the company in a high court. Engineers of the airline are also planning to take a similar course of action. 

"A notice has been served on Kingfisher Airlines (KFA) under section 433 and 434 of the Companies Act, which allows for starting winding up proceedings in case a company has outstandings and fails to clear them," said Ajay Brahme, the pilots' advocate. 

Brahme added that criminal proceedings will be initiated against the airline for "cheating and fraud" . "We've also sought action under the Income Tax Act as the airline deducted tax deducted at source (TDS) but did not deposit the same with tax authorities and failed to give Form 16 to employees ," the lawyer said. While the airline stopped paying salary eight months back, even earlier for many months it used to deduct TDS from pay but reportedly failed to deposit it with tax authorities. They, in turn, raised the demand from employees. 

While the ex-pilots have already initiated legal action against the airline, engineers are also planning to take similar steps. The Delhi-based KFA aircraft maintenance association met here on Sunday and decided to initiate winding up proceedings again the airline which has not paid them salary for last seven to eight months. 

"We will shortly be taking this action," said S C Misra of this association. 

Kingfisher has a combined debt-cum-losses burden of over Rs 16,000 crore. Airline promoter Vijay Mallya recently submitted a restart plan to the directorate general of civil aviation (DGCA) under which he proposed to start flying again with a capital infusion of Rs 650 crore from the parent UB Group. However, this amount has been dismissed as 'insufficient' by aviation minister Ajit Singh, who has made it clear that the airline can't fly again unless it is able to find adequate funds. 

Banks, mostly public sector ones with an exposure of Rs 7,500 crore to the airline, have also asked that the promoter infuse at least Rs 2,000 crore into the airline if he is serious about flying again. The Airports Authority of India (AAI) last week decided to give away KFA's slots to any airline that wants the same.

http://timesofindia.indiatimes.com/business/india-business/Pilots-seek-winding-up-of-KFA-to-get-dues/articleshow/18126474.cms

Q3 results: SpiceJet posts significant profit, showing strong turnaround

MUMBAI: Discount carrier SpiceJetBSE 3.25 %posted a profit of Rs 102 crore (post tax) for the quarter ending December as against a loss of Rs 39 crore for the corresponding quarter last year.

The airline attributes these numbers to maximum fleet utilization and an altered route mix on the regional as well as the international flights.

Despite a dip in passenger numbers sequentially the airline has managed to increase the number of passengers on its flights across the network by seven percent, though much of this comes from an increased number of flights on its international network

As the fuel costs have remained high for the quarter, SpiceJet has managed successfully to palm off the burden to passengers thereby increasing yields by 29% for the quarter when compared to the corresponding quarter last year.

"With better fleet optimization, an altered route mix (thanks to more international flights) and higher yields, fuel cost as a proportion fell to 45% of the total revenue in the current quarter as against 50% in the comparable quarter for the previous year," the airline said.

Revenue for the third quarter ended December 31, 2012 increased by 37% to Rs. 1,603 crore as compared to Rs. 1,173 crore of the corresponding quarter a year ago as the airline increased its market share to 19.20% from 16.80% in December 2011.

"To announce a profit of Rs. 102 crore for the third quarter in the current challenging environment is a huge achievement and clearly demonstrates that the strategic changes that SpiceJet have made in the last two years has created a platform for future success of the company," said Neil Mills, chief executive officer, said.

Equity analysts sais that SpiceJet results are an indication that there are structural changes in the industry that will help the overall environment.

Sharan Lillaney of Angel Broking who tracks the company and the sector said SpiceJet's profit is a result of contribution from retail and expansion on the international network. He also said that deployment of smaller regional aircraft like the Bombardier's Q400 helped the airline a growth of 80% on the regional routes.

Though there is lesser capacity available in the market, according to Lillaney, despite a dip in the passenger numbers SpiceJet has expanded its passenger base by seven percent as the number of aicrfat flying is reduced to 320 from a previous 380.

"SpiceJet would continue to concentrate on regional and international routes and its performance is not a one off," said Lillaney.

SpiceJet stock went up by 5.35% after the result was announced gaining Rs 2.35 at Rs 46.30 a piece.

http://economictimes.indiatimes.com/news/news-by-company/earnings/earnings-news/q3-results-spicejet-posts-significant-profit-showing-strong-turnaround/articleshow/18113937.cms

UDF decision on Aranmula airport project criticised

Senior Congress leader V.M. Sudheeran said here on Monday that the Oommen Chandy government was attempting to cover up the irregularities that had taken place in the name of the Aranmula airport project by taking 10 per cent equity in the controversial project.

Mr Sudheeran was speaking after inaugurating a public meeting organised by the people’s action council, Palliyoda Pallivilakku Samrakshana Samiti, to mark the 400th day of the agitation against the airport project.

Taking strong exception to the United Democratic Front (UDF) government’s approach to the private airport project, which, according to him, was against the interests of the local population, the Congress leader said there was every reason to suspect that the government was acting in the interests of certain financial forces.

According to him, a proper techno-economic feasibility study, foolproof environment impact assessment, an unbiased introspection into the claims of the promoters and above all the interests of the local population should have been made before giving the in-principle clearance for the project.

The previous Left Democratic Front government had failed in doing this for reasons best known to the people concerned. Unfortunately, Mr Chandy who was Mr. Achuthanandan’s successor had committed the same mistake, he alleged.

Mr. Sudheeran said Mr Chandy had made a grave mistake by sidelining the crucial report submitted by the Legislative Committee on Environment on the airport project.

This was tantamount to belittling even the authority of the Legislative panel, Mr Sudheeran added. The Assembly panel chaired by the Congress MLA C.P.Mohammed had unanimously opposed construction of the airport project by converting the paddy land and wetland at Aranmula, he said.

Mr Sudheeran said he had personally handed over a copy of the Assembly panel’s findings to Mr. Chandy so as to ensure the UDF government did not make any mistake on the issue.

He called upon the government to cancel the decision to take 10 per cent equity in the airport project and act strictly as per the findings and recommendations of the Assembly panel.

Peelipose Thomas, AICC member; K.K. Royson, former district panchayat president; Malethu Saraladevi, former MLA; and C.R. Neelakantan, social activist, spoke.

http://www.thehindu.com/news/states/kerala/udf-decision-on-aranmula-airport-project-criticised/article4330037.ece?homepage=true

Goemkar team to meet aviation secretary

The recently formed forum, Goemkar, will approach the Civil Aviation Secretary and the Chairman of the Airports Authority of India (AAI) during their Goa visit this week to express its stand and doubts of the people over continuance of Dabolim airport and finalisation of new Mopa airport in north Goa.

Convenor of Goemkar, Fatorda MLA Vijay Sardesai on Monday took exception to the government’s decision of going ahead with acquisition of 22 lakh sq. m of agricultural land at Mopa the very next day of the meeting held by the forum opposing the hurry over the airport project.

A meeting of the Mopa Airport Steering Committee will be held on Thursday in which the Civil Aviation Secretary and the Chairman of AAI are supposed to participate.

Taking these developments as an indication that the Mopa project is sought to be fast tracked even when many questions on its feasibility remain unanswered, Mr. Sardesai said the forum would take up the matter with the two officials. He criticised Congress MP Francisco Sardinha for backing the Mopa airport project.

http://www.thehindu.com/todays-paper/tp-national/tp-karnataka/goemkar-team-to-meet-aviation-secretary/article4331159.ece

Airport Metro resumes today

The Delhi Airport Metro Express corridor, shut down six months ago because of defects in the civil structure, resumes commercial operations from 5.30 a.m. this Tuesday (today).

A flat rate will apply across the line at a discounted nominal fare of Rs.30 per trip which is pegged as a “promotional initiative” where “passengers can travel from anywhere to anywhere on the line” only on the first day.

However, with the Commissioner of Metro Rail Safety (CMRS) giving clearance to operate trains at a reduced speed of 50 kmph, the 18/20 minute journey from the heart of the city to Terminal 3 of Indira Gandhi International Airport will now take at least 30 to 35 minutes.

“Reliance Metro’s Airport Express Line would run daily from 5-30 a.m. to 11-30 p.m. at a frequency of 15 minutes. Reliance Metro has made arrangements to provide seamless connectivity for Terminal-1 passengers to Aerocity Station through shared cab and shuttle bus services,” said the Reliance Infrastructure-backed Delhi Airport Metro Express Private Limited in a release.

While facilities such as cloak room, trolley and porter services and radio cab services will be available from Day One, check-in and baggage facilities for both international and domestic passengers will not be available for the time being. Among the new initiatives, the Airport Line has introduced new products in the form of ‘Return Journey’ tokens and ‘Sunday/Holiday’ discount tokens while retaining the monthly passes for regular commuters.

The line was shut down last July after problems arose due to defects in the civil structure. The defects have been rectified by the Delhi Metro Rail Corporation and the line was offered for re-inspection to the CMRS in December.

After a two-day inspection on January 15 and 16, the CMRS, R. K. Kardam, granted clearance to DMRC and Reliance-Infrastructure to resume operations on the 22.7-km line.

http://www.thehindu.com/todays-paper/airport-metro-resumes-today/article4330778.ece

Investigators probe Boeing 787 battery maker

Tokyo/Kyoto: US and Japanese aviation safety officials investigating problems with Boeing Co’s 787 Dreamliner visited the headquarters of the plane’s battery maker on Monday, seeking clues into why one of the technologically advanced aircraft made an emergency landing last week.

A spokesman for GS Yuasa Corp, which makes batteries for the 787, said the company was fully cooperating with the investigation, and its engineers were working with the officials from the US Federal Aviation Administration (FAA) and Japan’s Civil Aviation Bureau (CAB) at the company’s compound in Kyoto, where it makes airplane batteries.

CAB official Tatsuyuki Shimazu told reporters the investigating team had been briefed by GS Yuasa and had toured the plant, looking at battery design, production and quality. The Japanese investigation at the plant will continue on Tuesday on a more detailed level, including tracking battery batch numbers and production dates, he said.

Authorities around the world last week grounded the new lightweight Dreamliner, and Boeing halted deliveries after a problem with a lithium-ion battery prompted an All Nippon Airways 787 into the emergency landing at Takamatsu airport during a domestic flight. Earlier this month, a similar battery caught fire in a Japan Airlines’ 787 parked at Boston Logan International Airport.

Expanded Probe

US safety investigators on Sunday ruled out excess voltage as the cause of the Boston battery fire on 7 January, and said they were expanding their probe to look at the battery’s charger and the jet’s auxiliary power unit. The battery is one part of the 787’s complex electrical system, built by French companyThales SA.

“Results have shown the battery was abnormal in both the Boston and Takamatsu (incidents). They were the most damaged,” Shigeru Takano, a senior safety official at the CAB, told reporters ahead of the on-site visit to GS Yuasa. “We will look into if the work that took place, from design to manufacturing, was appropriate.”

Shares in GS Yuasa, valued at close to $1.5 billion, rose 1% on Monday, having dropped nearly 10% since the Boston fire. The benchmark Nikkei fell 1.5%.

The company, which employs nearly 12,300 staff, expects revenue of ¥288 billion ($3.2 billion) in the year to end-March - with only around 1% of that coming from its aircraft battery business. The company’s batteries are used primarily in motorbikes, industrial equipment and power supply devices.

GS Yuasa, in which automaker Toyota Motor Corp has a 2.7% stake, reported an operating profit of around $160 million in the year to last March.

More Flights Cancelled

The grounding of the Dreamliner, an advanced carbon-composite plane with a list price of $207 million, has forced ANA to cancel 151 domestic and 26 international flights scheduled for 23-28 January, affecting more than 21,000 passengers, the airline said on Monday.

The cancellations add to the 72 flights scheduled for 19-22 January that ANA called off last week. ANA, which flies the most Dreamliners of any airline, said it will announce on Thursday its plans on flight cancellations for dates from 29 January.

ANA said it had not yet decided whether to seek compensation from Boeing for losses as a result of the 787’s grounding. “At this point we’re concentrating on getting the Dreamliner back in service, rather than considering requesting compensation,” said spokesman Ryosei Nomura.

Rival JAL said it cancelled four flights on its Tokyo-San Diego route for 27-28 January, adding to the 8 flights originally scheduled for 19-25 January on the same route it called off last week. It said it had yet to decide changes for flights slated for 26 January.

“We’ve been able to rearrange routes originally scheduled to use the Dreamliner with alternative aircraft,” said JAL spokeswoman Sze Hunn Yap, adding there was no talk about compensation at this stage.

Japan is the biggest market to date for the Dreamliner, with JAL and ANA flying 24 of the 50 passenger jets that Boeing has delivered.

http://www.livemint.com/Companies/9XtkVJuGz9BAh0n3bVqLFI/Japans-ANA-cancels-335-flights-in-Dreamliner-glitch.html

Flights to Europe hit by bad weather

New Delhi, Jan. 21:  

Inclement weather conditions, including heavy snowfall in different parts of Europe in the last few days, led to delays and cancellations in flights being operated from different parts of the world, including India.

International agencies reported that flights from London’s Heathrow, Europe's busiest airport, were disrupted since Friday.

An Air India spokesperson said the airline had not cancelled any flights to Europe although there were some delays in operations. The airline operates flights to London and Frankfurt.

On Monday, German airline Lufthansa’s Delhi-Frankfurt flight was diverted to Munich because of snow in Frankfurt.

A spokesman for the Air France-KLM combine said while there were no cancellations, there had been reports of delays in flight operations to and from India.

“Till January 23, the Air France-KLM combine is also allowing passengers to change their travel date to certain destinations in Europe that have been affected by inclement weather, without having to pay cancellation charges,” said Yeshwant Pawar, General Manager, South Asia, Air France-KLM.

In a statement, Air France said it expected to operate all its long-haul flights and more than half its short- and medium-haul flights and expected the situation to become normal on January 22. British Airways said like other airlines at Heathrow, it too had complied with a request to reduce its schedule by 10 per cent today. British Airways said that if a flight had been cancelled, a passenger could either re-book on an alternative flight or claim a full refund, it said.

“Even if their flight has not been cancelled and they prefer not to travel today or tomorrow, customers can re-book later in the week, free of charge,” the airline said in a statement.

Passengers are being advised to visit the Web site of various airlines to get up-to-date information on flight operations.

http://www.thehindubusinessline.com/todays-paper/tp-others/tp-editorial-feature/flights-to-europe-hit-by-bad-weather/article4329893.ece

IndiGo to fly direct to Dubai

Thiruvananthapuram, Jan. 21:  

IndiGo has announced introduction of a daily direct flight connecting Thiruvananthapuram with Dubai and another daily direct flight between Mumbai and Dubai with effect from March 1. The airline will offer introductory all-inclusive return fare of Rs 11,998 on both the routes, a spokesperson said. A fast-growing airline, IndiGo has 61 brand new Airbus A320s and operates 377 daily flights, connecting 33 destinations.

http://www.thehindubusinessline.com/todays-paper/tp-others/tp-states/indigo-to-fly-direct-to-dubai/article4330028.ece

SpiceJet bounces back, clocks Rs 102-cr profit in Q3

Fleet optimisation, low fuel cost contribute to turnaround

Chennai, Jan. 21:  

Budget carrier SpiceJet has reported a net profit of Rs 102 crore for the third quarter ended December 31, as against a net loss of Rs 39 crore in the comparable previous year quarter.

The company has attributed this to relatively low fuel cost, fleet optimisation, better route mix and higher yields.

In a regulatory filing, the company said the fuel cost, as a proportion of the total revenue, fell to 45 per cent in the current quarter as against 50 per cent in the comparable previous year period. Notwithstanding this improvement, “which certainly augurs well for the civil aviation sector in the country, the fact remains that the Indian airline industry continues to bear the brunt of extremely high incidence of taxation”, the release says.

According to it, a weighted average tax rate of 24 per cent on aviation turbine fuel prices across various stations in India is among the highest in the world and constitutes the biggest hurdle for domestic carriers’ long-term growth.

The airline company, part of the Chennai-based Sun TV Network group, has posted a 37 per cent growth in income at Rs 1,603 crore from Rs 1,173 crore last year.

The average passenger yields in the quarter went up by 29 per cent compared to the corresponding quarter a year ago. The carrier’s domestic market share in December 2012 increased to 19.20 per cent from 16.80 per cent last year. The number of passengers in the quarter under consideration grew 7 per cent, and the number of departures went up 25 per cent — thanks to better fleet optimisation and route mix. Particularly, the company has reported 80 per cent growth in number of passengers, with 129 per cent growth in number of departures in its international routes.

The average passenger yields went up by 29 per cent to Rs 4,412 from Rs 3,421. The airline currently operates over 330 daily flights to 42 Indian cities and seven international destinations – including Dubai, Colombo, Guangzhou, Kabul and Kathmandu.

http://www.thehindubusinessline.com/todays-paper/tp-corporate/spicejet-bounces-back-clocks-rs-102cr-profit-in-q3/article4329914.ece

Focusing on growth in international, regional markets: SpiceJet CEO

New Delhi, Jan. 21:  

The low-cost airline SpiceJet has reported a profit after tax of Rs 102 crore for the quarter ended December 31. In an interview to Business Line, its Chief Executive Officer Neil Mills explains the reasons behind the change in fortunes of the carrier. Excerpts:

One of the reasons for the company returning to profit is better fleet optimisation. What exactly does that mean?

It shows that we are focusing our growth on international and regional services, particularly metro services to tier-II and -III cities. That is really where the strategic shifts have been and it is starting to show rewards.

Could you give an example?

Our regional growth is coming from routes like Indore, Jabalpur and Bhopal where there was not much connectivity before. This shows that the growth of the business is going to those areas.

Growth internationally?

Not particularly, because airports in tier-II and tier -III cities do not have particularly long runways so obviously that connectivity will happen through the metros. Our connectivity from tier-II and -III to international destinations is obviously growing and it will continue to grow.

What is it currently and by how much would it grow?

We have grown in terms of international passengers by 80 per cent and regional passengers by 82 per cent in the last 12 months. Our international business is 7 per cent of our total business in the current quarter and we expect to take it to 20 per cent over the next 18 months.

Is the 7 per cent growth in international business because you have added more flights? And is the 80 per cent growth in the number of international passengers because of the low base?

Yes, obviously because we have added more flights. There is a 25 per cent growth in the number of departures and a lot of those are smaller aircraft, the Q-400. Of course, it is because of the low base. Year-on-year we have grown significantly in international operations.

Is the focus shifting to international routes?

It is not that the focus is shifting to international routes. What we are doing is that the focus of the growth is shifting to international and regional markets. But the main market that we are catering to in India is pretty stable.

Fuel costs are falling in this quarter compared with the previous quarter. What do you attribute this to? Have you started importing fuel?

This is partially because of more international flights and partly because of an increase in average revenues.

Is it a cause for worry that Air India is ahead of you in terms of market share?

No. Whether I am at 19 per cent or 20 per cent or whatever, I still have not worked out a way to use the market share to pay the bills. As long as we are large enough to be significant, 1 per cent or 2 per cent one way or the other does not make a difference.

Where has the profit of Rs 102 crore come from? Is it from revenues generated from operational activities or non-operational activities?

It has almost all come from operational activities.

There is a mention that no provision has been made for interest of Rs 747.1 lakh up to December 31, 2012 relating to earlier years on the outstanding inter-corporate deposits taken by the company. Had this been accounted for, the net loss for the quarter ended December 31, 2012 would have been higher by Rs 747.1 lakh. Can you explain this?

There is an issue relating to the courts which has been outstanding for years. It has been in our accounts for years as well. We do not agree with it. We do not believe that we have to pay it. If it has been provided for, it would be different. We do not agree with it, we do not think we have any legal requirements.

This quarter you had the sale of 10 lakh tickets at discounted prices. Will this boost revenue in the next quarter?

We were targeting the seats that would not have been filled at all. It will help improve our load factors and not necessarily improve our yields. Because we are targeting filling the unsold seats it will certainly help improve the quarter results.

What is the status on tying up with a foreign airline?

We have always said that it is not necessary for us to go in for a foreign tie-up or with a source, be it a fund or a foreign airline. We will do the deal only if it makes sense. If the right deal comes along we will try and do it.

How do you describe a right deal?

It should make economic sense for the company and shareholders.

ashwini.phadnis

@thehindu.co.in

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Our international business is 7 per cent of our total business in the current quarter and we expect to take it to 20 per cent over the next 18 months. — Neil Mills, CEO, SpiceJet

http://www.thehindubusinessline.com/todays-paper/tp-corporate/focusing-on-growth-in-international-regional-markets-spicejet-ceo/article4329912.ece

SpiceJet posts Rs 102-cr net

Chennai, Jan. 21:  

Budget carrier SpiceJet is back in the black with a net profit of Rs 102 crore for the third quarter ended December 31, 2012, after it posted a net loss of Rs 163 crore in the previous quarter. In the third quarter of 2011-12, it posted a net loss of Rs 39 crore. The company has attributed this “huge achievement” to the relatively lower fuel cost — which fell to 45 per cent of the total revenue, against 50 per cent last year. The company posted a 37 per cent growth in income at Rs 1,603 crore from Rs 1,173 crore last year