Under Covid stress, SpiceJet's net loss widens to Rs 729 cr in Q1

The company says it continues to incur various costs owing to the grounding and the inability of Boeing 737 Max aircraft to undertake revenue operations

SpiceJet reported a standalone net loss of Rs 729 crore for the June quarter as the operations were significantly hit due to the continued impact of Covid‐19 which has seriously disrupted travel demand.

The company has been reeling under the Covid stress for quite sometime now as it had posted losses of Rs 235 crore and Rs 593 crore in the March quarter and corresponding quarter of last year respectively.

Revenue from operations rose 112 per cent to Rs 1,089 crore for the reporting quarter as against Rs 514 crore in the last year period.

“The last five quarters have been the most difficult phase ever for SpiceJet as aviation remained the worst‐hit sector during the second wave as well. Q1 was severely impacted by the second wave as passenger traffic almost disappeared. While no one can predict the future, with vaccination numbers picking up and demand for air travel increasing steadily, we hope the trend reverses soon," said Ajay Singh, Chairman and Managing Director, SpiceJet.

In terms of operational parameters, SpiceJet said it had the best passenger load factor among all airlines in the country during the quarter. The average domestic load factor for the quarter was 69.5 per cent.

Capacity (in terms of Seat Kilometres) increased by 229 per cent as compared to the same quarter last year.

"I am confident that SpiceJet will recover lost ground quickly as we are continuously ramping up our operations adding new stations and flights and are much better placed than this time last year. Our logistics arm continued with its strong growth story reporting yet another profitable quarter. We are making efforts to further strengthen the logistics business and are hopeful of driving a strong and profitable growth in the times to come," Singh said.

The company said it continues to incur various costs owing to the grounding and the inability of Boeing 737 Max aircraft to undertake revenue operations over the last two years now.

"We continue to engage with Boeing to recover damages on account of expenses incurred by the SpiceJet due to the grounding of the 737 MAX and also engage with aircraft lessors of the grounded MAX aircraft to restructure the present leases."

Its logistics platform SpiceXpress clocked a profit of Rs 30 crore. Revenue for the segment rose 285 per cent to Rs 473 crore from Rs 166 crore in the same quarter last year.

Ajay Singh said the company is the process of hiving off its logistics business, which he hopes, will unlock significant value for SpiceJet and its shareholders. This is said to allow SpiceXpress to raise capital to fuel its rapid growth.

SpiceJet launched 74 new flights during the quarter. The airline operated more than 300 charters transporting over 52,000 passengers across the globe. 

Ahead of the results, the scrip of the airline settled 0.84 per cent higher from previous close at Rs 71.90 on NSE.