Is aviation business actually in the black? Indian budget carrier Spice Jet has recorded a net profit of Rs 18.5 crore for the quarter ended June 30, 2007, compared with a net loss of Rs 3.4 crore during the same quarter last year. Jet Airways has also registered net profit of Rs 30.88 crore compared to a net loss of Rs 44.98 crore during the same quarter last year.

Apparently the rupee appreciation against dollar has played a big role in boosting the earnings. In the case of Jet Airways, the airline is paying back less money (on account of foreign exchange) on the $800-million foreign currency loan it had taken to finance its aircraft acquisition.

However, that alone may not be the reason for the turnaround of the two airlines. Private equity-backed SpiceJet’s total income for the quarter has risen by 77 per cent to Rs 311 crore from Rs 176 crore. According to the company’s CFO Partha Basu, higher capacity addition, improved yield and “constant focus on cost” have contributed to the positive bottomline. The company has also announced the appointment of Siddhanta Sharma as chairman.

Posted on 07/31/07, 3:42 PM
in: Main Page
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