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SpiceJet to buy more aircraft, ‘not thinking of stake sale’
SpiceJet reported a stellar set of Q1 numbers with revenues growing 37 per cent to ?1,521.53 crore and profits more than doubled to ?149 crore. Speaking to BTVi, SpiceJet Chairman Ajay Singh said the airline has grown its profits despite keeping fares steady in a challenging environment. It is also in advance stage to acquire more aircraft as it expects the aviation sector to grow 25 per cent.
SpiceJet reported a fantastic set of Q1 numbers. What has led to the growth and how are things looking like at this point?
We do not like to give guidance on quarters but in a challenging environment we think that we are growing responsibly and profitably. As you have seen that in this quarter, SpiceJet grew 37 per cent, which was the fastest by any of the major carriers in the country. Our capacity and revenues increased by 37 per cent. Our profits have more than doubled — they have gone up by 104 per cent. So, I think, we will grow profitably and that growth should not come at the expense of revenues or profits.
Despite high aviation turbine fuel prices, your margins have continued to increase as well. Can you take us through the mathematics there?
Well, firstly if you have noticed the unit revenue as well as the unit fares dropped marginally by about 2 per cent or so. The load factor has gone up by about 2.5 per cent. So, that has neutralised the impact on revenue and revenues have grown at the same level as capacity growth. In addition, we have been able to keep fares pretty much where they were despite a challenging environment. Ancillary revenue has grown by 64 per cent. So, all these factors have contributed to the margins that you see.
Can you also tell us a little bit more on plans in regards to fleet addition?
We will continue to explore opportunities of growth in the short-, medium- and long-term. We feel that there are certain opportunities and certain markets that we would like to enter and as a consequence, there will be a growth in our capacity in the winter quarter. We are also looking at placing orders for aircraft and that is at a very fairly advanced stage at this time. And we hope to complete that process over the next few weeks.
Are there any requirements for funding or are you well placed there?
Well, profits have been strong. We expect that the profits will remain strong for the year the cash position is also very strong. We don’t believe at this level of performance, we need to get any external financing or dilute our equity. We also feel that this is not an appropriate valuation for SpiceJet stocks. We will take calls as we progress down this journey. But at this time SpiceJet is in a very strong position in terms of the financial ability to place orders and move forward. Keenan Allen Jersey
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