Shares in SpiceJet slumped as much as 6 per cent on Friday after the company posted a record loss of Rs. 559 crore in the September quarter. SpiceJet had reported a net loss of Rs. 164 crore in the same period last year. Revenue from operations rose 6 per cent, while passenger numbers were up 9 per cent.
As of 09.20 a.m., SpiceJet shares traded at Rs. 18.95, down 4.8 per cent, and underperforming the broader Nifty, which traded 0.3 per cent lower. The stock hit a low of Rs. 18.65 in early trade. SpiceJet was also among the most traded stock on the broader BSE 500 benchmark.
Last month Jet Airways, the only other listed Indian carrier that is operational, also reported a record quarterly loss for the three months ended September 30.
What went wrong?
High fuel prices and weaker rupee hurt SpiceJet\'s profitability. Jet fuel prices in India are among the world\'s most expensive because of provincial taxes. SpiceJet also had to contend with a rupee trading near a record low, raising fuel costs which are mostly denominated in dollars.
India\'s fourth-biggest airline by domestic market share and controlled by billionaire Kalanithi Maran\'s Sun Group, added two more international routes last quarter, taking the total to 10.
SpiceJet is widely seen as the next likely target for foreign investment after the government last year began allowing foreign airlines to buy as much as 49 percent of a local carrier. SpiceJet has said it has received some interest from potential investors but has not named any.
Aviation sector in a mess
Market leader IndiGo apart, all four of India\'s other airlines are money-losing. Kingfisher Airlines, once India\'s second-biggest carrier, has not flown in a year for want of cash and has had little success so far in its bid to revive operations.
SpiceJet\'s auditor said in the company\'s annual report as of end-March that the company\'s ability to remain a \"going concern\" depended on establishing profitable operations and raising funds.
SpiceJet has been without a chief executive since announcing Neil Mills\' resignation in early August but the company recently appointed Sanjiv Kapoor, a former Northwest Airlines and Temasek executive, as its chief operating officer.
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