Hard to predict return to profits; cargo biz doing well, says SpiceJet CMD Ajay Singh
SpiceJet working towards reducing costs and increasing revenues, but many factors ‘beyond control,’ says CMD Ajay Singh. Rising crude oil prices are making matters worse for airlines in general.
February 12, 2021 / 12:37 PM IST
Ajay Singh, Chairman and Managing Director of low-cost carrier SpiceJet
Even as SpiceJet’s losses have been narrowing, it is difficult to say how soon the airline will return to the black, Chairman and Managing Director Ajay Singh told CNBC-TV18.
Singh said his company was working towards reducing costs and increasing revenues, but many factors were beyond its control.
He said leisure travel was picking up, but not corporate travel. So while loads have been rising, yields continue to remain depressed, he said.
SpiceJet’s accumulated losses for this financial year so far stand at Rs 770 crore. Rising crude oil prices are making matters worse for airlines in general.
Singh said the government needed to review taxes on fuel, adding that India had the highest rate of tax on jet fuel globally, in excess of 35 percent.
Things are unlikely to improve much this quarter as the last quarter of the year is traditionally a weak one, Singh said.
He expects corporate travel to remain muted for the foreseeable future and wasn’t too hopeful of international travel either.
Singh said the cargo business has been a bright spot for the company throughout this tough phase, and that revenues in this segment have grown fourfold. He said the cargo business had immense potential and that SpiceJet was looking to expand its cargo operations in the coming quarters.
Singh said the grounding of the Boeing 737 Max aircraft had led to significant losses for the airline, and it was seeking compensation from the aircraft maker. He declined to disclose the figure SpiceJet was seeking from Boeing in damages but said the number was ‘extremely significant’ and that it was looking to close the matter at the earliest.Source: CNBC-TV18