SpiceJet comes out of red, posts net profit of Rs 22.51 cr | business | Hindustan Times
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SpiceJet comes out of red, posts net profit of Rs 22.51 cr

business Updated: May 29, 2015 01:32 IST
Spice Jet

Coming of the red after seven quarters, SpiceJet posted a Rs 22.51 crore net profit in the January-March period of FY15, helped by a Rs 650 crore funding by the new promoter, renegotiated contracts with its vendors and provisioning for re-delivery expenses.

The airline had reported a net loss of Rs 321.50 crore in Q4 of FY14. SpiceJet has also for the first time reported profit in the fourth quarter of a fiscal since 2010.

The new promoter Ajay Singh has, so far, infused Rs 650 crore in the carrier, Chief Financial Officer of SpiceJet, Kiran Koteshwar said, whose appointment as the full-time CFO was approved by the airline board today. "The new owner has so far infused Rs 650 crore in the carrier as part of the revival plan.

A major chunk of the funds have gone into clearing the dues of various vendors, government taxes and lessor companies. A part of it has also been utilised in repayment of some of the banks dues,"he said.

Despite profit, the airline's income from operations declined by almost half to Rs 786.32 crore in the reporting quarter as compared to Rs 1,573.75 crore in the January-March quarter of the fiscal 2013-14. The company under the new promoter/owner has focused on restoring operational reliability and winning back customer confidence to boost revenues, while negotiating settlements and re-negotiating several major contracts to bring down costs, the airline said in a statement.

"These results indicate that a recovery is in progress, and the first tangible evidence of the ongoing revival. We still have a lot of work to do. Our results show the resilience of the SpiceJet brand," SpiceJet chairman Ajay Singh said.

SpiceJet survived extinction early this year following Singh coming to its rescue with an investment plan early this year. Singh acquired entire 58.4 per cent stake from erstwhile promoter Maran family's under a revival plan, which entails an investment of Rs 1500 crore phased manner by the new promoter. Koteshwar also said that SpiceJet is likely to have a fleet of 25 Boeing-737 planes by the fourth quarter of the calender year, adding that, "the target is 30 but we may end up with five more from 20 now."