SpiceJet likely to raise fares if fuel costs continue to surge
27 May 2008
New Delhi: Even as surging fuel costs dim the outlook for the year, Indian low-cost carrier, SpiceJet, now says that it does not expect to break even before 2009/10. In an interview with news agency Reuters, chief financial officer, Partha Sarathi Basu has said that the carrier could raise passenger fares if aviation turbine fuel (ATF) prices rose more than 4-5 per cent in a month.
Basu told the agency that 52 per cent of the operating costs of the LCC today is fuel price, as compared to 44 per cent last year.
He also said that the carrier expects its sales and passenger traffic to grow between 15-17 per cent for the year ending March 2009, which will be slower than for 2006/07.
In spite of slower growth, tighter earnings and cost cuttings, Basu said that the carrier will continue to add capacity and new destinations. He said that SpiceJet will be adding six aircraft this year, taking fleet strength to 24.
He also said that two more destinations would be added to the existing 18 in the year ending March 2009.
