Indian low-cost carrier SpiceJet slipped to a full-year operating loss of Rs2.39 billion ($34.3 million) for the 12 months ending March 2019 as higher oil and currency costs over the first half took a toll.
The loss compares with an operating profit of Rs5.57 billion for the previous year and comes amid a challenging climate for all Indian operators that has seen Indigo Airlines post its first operating loss since 2011 and the grounding of Jet Airways. It marks a return to the red for SpiceJet after three profitable years.
Notably most of the losses were incurred over the first half of its financial year, when pressure from high fuel cost and the depreciation of the Indian Rupee was at its strongest. Indeed, SpiceJet posted a slightly improved operating profit of Rs562 million for the fourth quarter.
Total revenue for the year ending 31 March increased 17.5% to Rs92.7 billion, reflecting a sharp expansion. SpiceJet boosted its capacity 13% during the year.
But SpiceJet costs jumped almost 30% to Rs95 billion, driven by the rise in fuel expenditure.
Alongside the operating loss, SpiceJet made an attributable net loss of Rs3 billion for the full year. That compares with net profit of Rs5.6 billion the previous year.
For the year to 31 March, SpiceJet increased its fleet to 76 aircraft. It did though have to ground 13 Boeing 737 Max fleet, after the type was grounded from global operations in March.
Taking advantage of the recent grounding of Jet Airways, SpiceJet says it was able to raise its fleet size to 100 aircraft by taking 25 aircraft in 30 days. On the network front, it began 106 new services out of Delhi and Mumbai, and signed a codeshare deal with Emirates.
SpiceJet chairman and managing director Ajay Singh expressed optimism that his carrier will see improvements for the fiscal period ending in March 2020.
"With a massive fleet expansion this fiscal, a favourable operating environment, a likely return of the 737 Max in July, significant improvements in yields and prime slots at key airports, we are confident of a strong performance for FY2020," says Singh.