Despite a fragmented ownership structure and speculations over ownership change, SpiceJet has managed to come out with strong numbers by reporting its first-ever annual profit of Rs 61 crore. This was largely due to a cost-effective service steered by employees, Sanjay Aggrawal, CEO, SpiceJet, told HT. Excerpts.
How did you improve profits?
We managed to improve our margins in the last three quarters and reported an annual profit of Rs 61 crore for the fourth quarter ended March 31, 2010, as against a net loss of Rs 353 crore in the corresponding quarter a year-ago. Without demand, this could not have been possible. Passengers came to us because they got the best value for money. We invested in the brand and that paid off.
Where do you see demand going?
We expect demand to remain robust this year. The industry is expected to grow 16 per cent and SpiceJet will outperform the industry. Last year we added 20 per cent more kms and seat factor increased 44 per cent. Yields have also stabilised. With demand growth and capacity restrictions, I think the industry is going to do better. Going by last year’s performance, we will continue to be the preferred carrier.
When will you begin international operations?
This week we completed five years of operations and we are now eligible to fly overseas. We will start overseas services by July. We have received permission to operate to Dhaka, Male and Kathmandu. We are keen to fly to Colombo first. Our main objective is to enhance aircraft utilisation during nights.
What are SpiceJet’s fleet expansion plans?
We have 20 aircraft, all Boeing 737-800s. In the current fiscal year, we will induct four more aircraft. By 2012, we will have a fleet of 28 aircraft.
What are your fund-raising plans?
The board has given approval to raise up to $74 million (Rs 350 crore) through American depository receipts, global depository receipts and qualified institutional placements. We are sitting on a cash pile of Rs 450 crore. We do not require funds immediately.