Airline operator SpiceJet on February 24 reported a 160% jump in its consolidated net profit at INR 110 crore for the quarter that ended December 2022. Its net profit stood at INR 42 crore in the year-ago period.
The company's revenue from operations jumped 2.4% to INR 2,316.8 crore as against INR 2,262.6 crore in the year-ago period. In Q2 FY23, the company reported a loss of INR 833 crore on revenue of INR 1,954 crore. The carrier’s load factor, or the passenger carrying capacity being utilised, improved to 91% from 85.2%.
After the results announcement, the stock spiked over 12%. At 2:45 pm, the stock was quoting at INR 38.80, higher by 9.6%. The stock jumped 12.31% to settle at INR 39.70 on the BSE. During the day, it rallied 15.27% to INR 40.75. In volume terms, 25.44 lakh shares were traded on the BSE during the day.
For the quarter that ended December 31, SpiceJet’s passenger revenue surged 33% as yields, a proxy for airfares, jumped 21%. That helped offset a sharp decline in revenue from its freight and logistics business. Overall revenue was up 2.5% at 23.15 billion rupees.
“We exceeded our operational targets and continued with our unmatched performance clocking the highest load factor for every single month in 2022. The profits have been driven by a strong performance in both our passenger and cargo businesses. There are renewed signs of recovery and some positive developments and restructuring initiatives in the immediate offing that would significantly strengthen and deleverage SpiceJet balance sheet."
Ajay Singh, Chairman and Managing Director, SpiceJet
However, the company did flag concerns over high fuel prices and the depreciating rupee. The company said the average aviation turbine fuel price rose by 48% during the quarter, while the Indian rupee depreciated 11% against the U.S. dollar.
The airline's passenger Revenue per Available Seat-Kilometer (RASK) rose by 27% in October-December when compared to the same quarter last year. It launched 15 new routes and operated 254 charter flights in the quarter.
Its air cargo service SpiceXpress has reported a net profit of INR 12 crore and revenue of INR 120 crore for the quarter. The airline said its board is considering raising fresh capital through the issuance of eligible securities to qualified institutional buyers, by applicable law.
SpiceJet Q3 net profit jumps 160%; shares fly high
The December quarter is traditionally strong for airlines as the onset of festivals and the holiday season boosts air travel. The quarter also saw a steep rise in airfares on record passenger demand and helped Indian airlines such as IndiGo report a record profit, and privately held Vistara said it has broken even for the first time since inception.
For SpiceJet, total income from operations rose 6% to INR 2.829.5 crore in the quarter. Of this, total revenue from operations stood at INR 2,314.6 crore, and other income was at INR 514.9 crore. The airline has credited the other income to the settlement with Boeing for 13 grounded MAX aircraft and waiver of lease rentals on some aircraft, which were showing technical issues and were then returned during the period.
The financially troubled airline also stated that it is in talks with banks to raise an additional INR 763.9 crore loan under the central government's Emergency Credit Line Guarantee Scheme (ECLGS). In Q3 and Q2 of 2022-23, the airline took bank loans of INR 150.9 crore and INR 60 crore, respectively, under the ECLGS. In the current quarter, it is receiving an INR 128.6 crore loan from banks under this scheme.
ALSO READ - Spicejet looking for a “knight in shining armour” to help with financial distress
In December last year, SpiceJet chairman and managing director Ajay Singh told shareholders that the company is engaged with investment bankers to raise up to USD 200 million to achieve its plans. He had also said the increase in the Emergency Credit Line Guarantee Scheme to INR 1,500 crore will go a long way in providing the needed stability to the sector.
ALSO READ - SpiceJet to sell 5% stake of SpiceXpress to Carlyle Aviation Partners
Reports also said that Carlyle Aviation Partners, a leasing firm owned by global private equity giant Carlyle Group, may convert its outstanding rental dues into equity, obtaining a 5% stake in the low-cost carrier.
ALSO READ - SpiceJet aims to pay off aircraft lessors’ outstanding debts by converting them into investors
The proposed deal would involve Carlyle converting more than USD 100 million of SpiceJet's outstanding dues into equity as well as compulsorily convertible debentures (CCDs) in SpiceJet's cargo arm, SpiceXpress. As one of the biggest lessors for SpiceJet, this move is expected to significantly reduce the airline's debt and pave the way for future growth.
ALSO READ - SpiceJet plans to raise funds & convert outstanding liabilities into equity shares
SpiceJet said it has not been operating various aircraft due to technical reasons and despite its inability to undertake revenue operations, it continued to incur various costs concerning these planes. According to its website, the airline has a fleet of 91 planes.
Meanwhile, SpiceJet rescheduled its board meeting to consider capital raising options from Friday, February 24 to Monday, February 27.
The airline last year suffered a string of mid-air safety lapses that drove India’s aviation regulator to halve its approved fleet in July 2022. The curb was removed on October 30.
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Air India to hire 900 pilots & 4200 cabin crew in 2023 after new aircraft order
Tata Group-owned Air India is on the lookout for over 4200 cabin crew and 900 pilots in 2023 as the airline adds new aircraft and rapidly expands its domestic and international operations. Currently, Air India has around 1,600 pilots to operate its 113 aircraft fleet and in recent times, there have been instances of ultra-long-haul flights getting cancelled or delayed due to a shortage of crew.
The airline's two subsidiaries -- Air India Express and AirAsia India -- together have around 850 pilots for flying their 54 planes while the joint venture Vistara has more than 600 pilots.
ALSO READ – From A350s to B777Xs, Air India finalizes the Historic 470 Aircraft deal with Airbus & Boeing
Air India to hire 900 pilots & 4200 cabin crew in 2023 after new aircraft order
The airline announced its mega aircraft order with Airbus and Boeing on February 14, which involves 470 airframes and options for a further 370, which could potentially take the carrier to 840 planes - the order includes 210 Airbus A320neo family jets, 40 A350s, 190 Boeing 737 MAXs, 20 787s, and 10 777Xs. It has already announced plans to lease 36 aircraft (11 Boeing 777s and 25 Airbus A320s) of which two B777-200 LR have already joined the fleet.
ALSO READ - Air India will require 6500+ pilots for the recently ordered 470 aircraft
"The cabin crew, who will be recruited from around the country, will undergo a 15-week programme imparting safety and service skills and will be coached to exemplify the best of Indian hospitality and Tata group culture. The training program will include extensive classroom and in-flight training at the airline’s training facility in Mumbai as well as familiarization flights," the airline said in a statement.
ALSO READ – What should an Ideal Air India Training Academy be like?
Between May 2022-February 2023, Air India hired over 1900 cabin crew. Over 1,100 cabin crew have been trained in the last seven months (between July’22-January’23), and in the past three months, approximately 500 cabin crew have been released for flying by airline.
“With a sizeable aircraft order that was announced earlier in the month, more flights on international and domestic networks, and re-alignment of domestic routes with AIX connect, cabin crew will play a decisive role in shaping the present and future of the Air India group. Addition of fresh talent will also accelerate the pace of cultural transformation at Air India, which is an integral part of our Vihaan.AI transformation program. We are also looking to step up hiring of more pilots and maintenance engineers.”
Sandeep Verma, Head - Inflight Services, Air India
Air India, or “Maharaja”, landed back in the hands of its founders in January last year, nearly seven decades after it was nationalised and following years in debt. Tata Group was back in charge of Air India after concluding the INR 18,000 crore deal. The historic handover marked the end of a long search for a buyer by the government, which has spent nearly crores propping up the airline since 2009.
Tata Group, at present, is realigning its aviation business under the Air India brand umbrella. It plans to have a single low-cost airline and a single full-service airline by the end of 2023.
The former will be a merged entity between AirAsia India and Air India Express while the latter will be the merged entity between Air India and Vistara. The recent hiring started in the aviation sector after years of lull. Owing to cut-throat competition and other external challenges, India witnessed the closure of a few big airlines last decade.
Boeing will end the F/A-18E-F Super Hornet production line in 2025 and will not accept any more U.S. orders beyond the eight aircraft Congress added to the fiscal 2023 budget. The company, describing the move as a “pivot,” will refocus its people and facilities on other projects and look ahead at future work, it said in a Feb. 23 statement.
With the St. Louis-based workforce and production facility freed up, Boeing said it will be able to increase production of the T-7A Red Hawk all-digital training system, F-15EX Eagle IIs and 777X wing components for the U.S. Air Force and the MQ-25 Stingray unmanned tanker drone for the U.S. Navy.
Additionally, the company plans to devote more attention to developing future programs. The company is building three new facilities in St. Louis for advanced crewed and uncrewed platforms.
Boeing will close Super Hornet production line in 2025.
Boeing’s announcement caps off a decade of fluctuations for the Super Hornet production line. The Navy initially planned to stop buying the jets in FY14, amid sequestration budget caps, only for Congress to continue adding planes incrementally over the next few years.
The Navy will have bought a total of 698 Super Hornets over 30 years, according to budget documents. India is still in the process of selecting a fighter, and the Super Hornet is one option under consideration. If the Indian Navy selects the Super Hornet, Boeing would build those aircraft and shut down the line in 2027 upon their completion.
Asked about the timing of the decision to close the production line, VanNierop cited internal and external factors.“We must inform our customer and supply base as long-lead aircraft parts and components are ordered and built well ahead of Boeing’s final assembly schedule,” she said.
Boeing’s announcement caps off a decade of fluctuations for the Super Hornet production line.
The Super Hornet Service Life Modification program, which upgrades the jets and adds about 4,000 flight hours to their service life, along with an EA-18G Growler modernization program, will continue into the 2030s on a separate production line in St. Louis.Boeing has not spoken publicly about specific future projects.
However, Boeing Defense, Space and Security CEO Ted Colbert told reporters last summer, months after taking the helm, that “fighters are an important business to the Boeing Company.” Despite the last major U.S. military aircraft programs going to Boeing competitors — the Joint Strike Fighter program to Lockheed Martin and the B-21 bomber to Northrop Grumman — Colbert said “we haven’t given up the fight in that space. We are continuing to invest in it.”
With inputs from Defense news.
European Airlines say Chinese airlines flying over Russia have unfair advantage'
Recently, there have been claims that Chinese airlines have an unfair advantage when flying over Russia. This issue has sparked a heated debate among airlines, aviation experts, and governments around the world.
European airlines have warned they will struggle to compete with Chinese rivals as travel rebounds after Covid-19 lockdowns because they are forced to take longer routes to Asia to avoid flying over Russia.
Ben Smith, chief executive of Air France-KLM, said Chinese airlines had an “unfair advantage” over European carriers that have been banned from Russian airspace since the full-scale invasion of Ukraine almost a year ago.
Russia’s invasion of Ukraine redrew some of the world’s main flight paths, cutting European airlines off from Russian airspace when flying the “great circle route” over northern Russia. But Chinese carriers can still fly over Russia and take shorter routes to Europe.
Airlines claim Chinese carriers flying over Russia have unfair advantage'
“Between Paris and Seoul, it can add up to three hours in flight time,” Smith told the Financial Times. “If you’ve got a Chinese carrier that is flying over Russia, they’ve got an unfair advantage over us.”
Finnair chief executive Topi Manner this week also warned that European airlines were at a “significant” disadvantage. “We think that what this will mean is that it will be very hard to make secondary cities of China profitable in terms of flying,” he said.
Finland’s flag carrier built its business by using its location in the north of Europe to offer quick flight paths to Asia through northern Russia, and was badly hit by the sudden closure of the country’s airspace last year. “It adds hours to the journey and thus fuel, costs and emissions,” said Andrew Charlton, an aviation consultant.
Finnair flights between Helsinki and Tokyo now take over 13 hours, up from 9 hours 30 before the airspace closures. Charlton said the rerouted flights would also add to congestion in the skies over Europe, leading to likely air traffic control delays.
With inputs from financial times.
In a first for an Indian private company, Godrej Aerospace has bagged the order to manufacture eight modules of the DRDO's turbojet engine.
On Monday, Godrej & Boyce, the flagship company of the Godrej Group, announced that its business Godrej Aerospace is the first Indian private company to win the order for manufacturing eight modules of the DRDO Engine for aerial applications.
Godrej Aerospace won the order competing with over 25 companies owing to its strong infrastructure, proficiency in working with unique materials, and decades of experience in producing liquid engines for rockets, as well as its service to global aviation majors.
This venture opens up a world of opportunities for future projects to be manufactured indigenously in India, the company noted.
"We are thrilled to have won the project to manufacture the DRDO Engine modules, which is a testament to our capabilities and expertise in the aerospace sector. This achievement reinforces our commitment to making India self-reliant in aerospace manufacturing thereby, contributing to the country's economic growth."We look forward to leveraging our extensive experience and competencies to serve the needs of global majors in the aviation & defence sector and contribute to the growth of the industry."
Maneck Behramkamdin, AVP & Business Head, Godrej Aerospace.
This experience will pave the way for future projects to develop modules for civil aviation engines as well, the release noted. The company has made an investment of around 500 crores for aerospace and defence projects and has incorporated new processes into its manufacturing processes.
With inputs from economic times.
Israeli carriers can now fly directly to India with Oman opening its airspace
24 Feb 2023
24 Feb 2023
Prime Minister Benjamin Netanyahu on Thursday, February 24 welcomed the authorisation for Israeli carriers to fly over Oman as a "great day" for the aviation industry as it will connect the country directly with India and also help establish Israel as the main transit point between Asia and Europe.
"The Far East is not so far away and the skies are no longer the limit", Netanyahu said in a statement after receiving the Omani authorisation. "This is a day of great news for Israeli aviation. Israel has, in effect, become the main transit point between Asia and Europe", the Israeli prime minister added.
Israel received authorisation from Saudi Arabia and the Israeli leader said that he worked since his 2018 visit to Oman on getting permission for Israeli carriers to fly over its airspace so that they could go directly to India and onwards to Australia. Oman and Israel do not have diplomatic ties.
Prime Minister Benjamin Netanyahu welcomed the authorisation for Israeli carriers to fly over Oman as a "great day" for the aviation industry as it will connect the country directly with India
"This was achieved today, after considerable effort, including in recent months. Here is good news - Israel is opening up to the east on an unprecedented scale", Netanyahu stressed.
Until now, Israeli airlines' flights to East Asia, India and Thailand were forced to fly south to avoid the Arabian Peninsula - a route that added two and a half hours and wasted expensive fuel, local media reported. With the Omani announcement, Israeli flights can shave off two to four hours to popular destinations like India and Thailand.
The development could potentially reduce ticket prices as well, given that airlines would save money on fuel. Air India has been flying from Tel Aviv to Delhi directly using Saudi and Omani airspace, which saves time and makes the flights much more cost-efficient.
“Tel Aviv-bound foreign carriers such as Air India could operate over territory which El Al couldn’t. There was a significant fare difference because of the routing in favor of the likes of Air India,” he said.
El Al’s nonstop flight from Tel Aviv to Bangkok is currently listed as taking 10 hours 45 minutes. But a nonstop flight on Royal Jordanian from Amman – 100 miles east of Tel Aviv – takes 8 hours 10 minutes. In fact, flying from Tel Aviv to Amman, and then on to Bangkok can be quicker, even including transfer time at the airport – a connecting flight can take as little as nine hours 55 minutes on Royal Jordanian.
When the airline was banned from Saudi airspace, El Al flights from Tel Aviv to Mumbai took 7 hours 45 minutes. That flight time was then slashed to 5 hours 15 minutes before the route was put on hold.
On February 23, the Civil Aviation Authority of Oman announced that it will open its airspace to “all carriers that meet the requirements of the Authority for overflying” – effectively ending the ban on El Al, Israir and Arkia, Israel’s three airlines.
Last year Saudi Arabia allowed Israeli airlines to use its airspace but because Omani airspace was closed, Israeli carriers could not use the route to fly to Asia. The Saudi Arabian decision came after United States President Joe Biden visited the region last year.