Indian budget carrier SpiceJet does not need to raise capital to fund its aircraft purchases from Bombardier, its chief executive said on Friday.
SpiceJet in November agreed to buy up to 30 Nextgen turboprop aircraft from Bombardier for about USD$915 million. The initial order was for 15 planes.
The company, India's most profitable airline, will fund the purchase through cash in hand and credit, Neil Mills said in an interview.
"From our point of view, we are looking at predominantly export credit funding... We are posting profits, options for funding have grown," Mills said.
"We are not looking at additional capital raising in the short term." he added.
Mills said he expects the company to grow "well beyond" the industry average of 14-16 percent over the next 12-18 months, and load factor to exceed 80 percent in FY11.
SpiceJet will add 13 new planes to its current fleet of 25 planes in 2011, Mills said.
"I think budget airlines will grow at a big proportion. We are not only growing at the market pace, we are actually outpacing that."
SpiceJet, which operates two international routes as of now, may add one or two more by summer, Mills said.
"We are not looking too far away from India... international is not a prime focus of our business," Mills said.
DISAPPOINTED INVESTORS
On Thursday, SpiceJet posted a 14 percent fall in profit for October-December, as higher fuel costs and taxes offset a rise in net sales.
"The difference here is we are paying taxes because me made profits for five consecutive quarters. We have to pay taxes, that's life."
"I think what they (investors) have done is they have increased their expectations to a point which was unrealistic. While we delivered good results, they were expecting something miraculous."
India's domestic passenger traffic grew 18.7 percent January to December last year led by a burgeoning middle class in Asia's third largest economy. Many Indian carriers are expanding their fleets on rising demand in India, where the economy is growing at nearly 9 percent.