Outperforms the domestic industry with a 28% passenger growth

Chennai, November 11, 2011

Spiraling fuel prices and a depreciating rupee combined to make an already tough environment even more challenging during the quarter ended September 30, 2011. Despite this, SpiceJet continued to grow passenger traffic by 28%, outperforming the domestic industry passenger growth of around 19%.

Aircraft fuel expenses were 83% higher than same period last year and Fuel Cost constituted 63% of the total revenue in the current quarter as compared to 43% in the comparable quarter for the previous year.

The pricing environment continued to be weak, resulting in a decline in the average passenger yields in current quarter by 4.8% to Rs.3,317. With increased capacities getting inducted, load factor during the quarter were down to 67.4% from 73.6% during the same period last year.

SpiceJet posted a loss of Rs.240 crores for the quarter ended September 30, 2011 compared with a profit of Rs.10 crores for the comparable period last fiscal year.

Highlights for the quarter ended September 30, 2011 vs September 30, 2010

Operational

28% growth in number of passengers.
30% growth of Available Seat Kilometers.
40% growth in number of departures.

Financial

22% increase in Revenue from Operations.
4.8% decrease in passenger yields to Rs.3,317 from Rs.3,483
Net loss of Rs.240 crores for the quarter compared to a Net profit of Rs.10 crores

Neil Mills, Chief Executive Officer said, “The traditionally weak July-September quarter was made more challenging this year by high fuel prices, depreciating rupee and an irrational pricing environment. The highlight of this quarter was the successful launch of our Bombardier Q-400 operations, adding 7 new cities to the SpiceJet network. The initial response on all these routes has been very encouraging. We believe that the future of aviation growth in the country will be driven by connectivity to Tier-II and Tier-III towns from the metros. SpiceJet is well positioned to exploit the emerging opportunities in these rapidly growing and under served locations.

We remain confident about the long-term prospects for air travel in India. The promoters have infused an additional equity of Rs 131 crores recently in the month of October 2011. But we do hope that pricing aberrations of the past few quarters that have plagued the industry will get rectified soonest. In fact, the developments of the past few days perhaps indicate that a more rational operating environment may soon be around the corner”

Business Update for July – September 2011

Domestic traffic grew at 19% during the quarter over the same period previous year and continued to show increasing inclination towards the low-cost carriers. The market share of LCC’s increased from 42% during Q2F11 to 47% during Q2FY12. However, yields remained under severe pressure due to a irrational pricing policies adopted the larger domestic carriers thereby undermining the airline’s ability to pass on the impact of the higher fuel price to the passenger in a growing market.

SpiceJet outperformed the broad industry yet again with a 28% growth in passenger traffic. It also improved its market share from 12.8% to 13.7% during the same period in the previous year.