Expense analysis: Kingfisher Airlines vs. Jet Airways vs. SpiceJet

Jet Airways, Kingfisher Airlines and SpiceJet are the only three publicly listed airlines in India, and are required to release their quarterly results.

Using the results of the third quarter which ended December 31, 2008, I compiled three graphs to analyse their expenses. Depreciation and interest is included as part of expenses and other income is included as part of income.

It is important to realise each airline is compared against itself. For example, due to its low cost carrier model which forces lower expenses, SpiceJet will show a higher proportion of its operational expenses for fuel compared to the full service Jet Airways and mixed model (full and low cost) Kingfisher Airlines.



Graph 1 clearly shows that Jet Airways in the lead with the lowest expenses to income ratio at 117% up 16% from the same 9 month period from last year. The greater than 100% numbers indicate a loss. Kingfisher is spending 49% more than its income, up 10% from the same period last year. Is it any wonder the airline is in trouble ?

Click on any of the images for a larger version

Graph 2 goes a little more in detail on the expenses of the airlines. Due to the differing heads of accounts, I was forced to do a little consolidation. I have also included interest and depreciation as part of the expenses, Kingfisher and SpiceJet have managed to bring down their operational expenses by about 5%, clearly the effects on the plunging jet fuel prices.

Jet's expenses have gone up 5%. I can only surmise it is due to the cost of their uber-luxurious Boeing 777-300ERs. Now that Jet has leased out seven of its 11 777s, these expenses should come down.

Both Jet and SpiceJet have brought down their employee costs by about 2.5%. Something Kingfisher has not yet been able to achieve, and desperately needs to.

SpiceJet shows "other expenses" which includes legal, professional and consulting expenses, but the airline does not provide details in its statement.


Graph 3, shows a break up of the operational expenses as a percentage of total expenses including interest and depreciation. Kingfisher still leads the pack with the highest OpEx of 81.2%. Again Jet Airways has gone against the trend and increased its OpEx by a whopping 8% thanks to those empty international flights.

Do observe; jet fuel expenses constitute only about 36% of total expenses. So airline execs better be careful the next time they blame fuel prices for their woes.

SpiceJet with its low cost model enjoys a 16% advantage in "other operating expenses" when compared to its full service counter parts.


Unlike airlines overseas, no Indian carrier reports its performance in terms of Revenue Passenger Kilometres/Miles (RPK or RPM) or Freight Ton Kilometres/Miles (FTK or FTM). I think it is time for airlines in India to take analysts in to their confident and start sharing this information, if nothing else, it builds trust.

Please note, these graphs are copyright, but you are free to use them, unaltered, with due credit and a link to Bangalore Aviation.