India's SpiceJet posts INR2.6bn net profit in fiscal Q1

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Indian low cost carrier SpiceJet earned a net profit of 2.6 billion Indian rupees ($54 million) in its fiscal first quarter, compared with a loss of 13 billion rupees a year back.

Total income for the three months ended 30 June rose 11% to 5.3 billion rupees, up from 4.8 million rupees 12 months ago, says the airline.

The return to profits was helped by a 41% drop in fuel costs. SpiceJet spent 1.8 billion Indian rupees on fuel versus 3.1 billion rupees a year before.

The carrier says the number of passengers carried grew 21% in the first quarter, with ASKs up 12% and load factors rising to 76% from 70%.

"We had a great quarter given the challenges the industry continues to face," says SpiceJet CEO Sanjay Aggrawal. "We saw an increased acceptance of our service by the consumers. This helped in absorbing the additional 10% capacity that we deployed over last year. Our market share improved from an average of 10.4% during Apr-Jun'08 to 12.4% during the current quarter. We expect the yields to remain under pressure during the quarter July to September, which are traditionally weak months for travel."

The airline also noted an increasing trend for passengers to use low cost carriers in the quarter. "More than 55% of passengers travelled on low fare airlines in comparison to 45% last year," says SpiceJet.