Turning profitable, SpiceJet on Friday reported its highest-ever quarterly profit of Rs 261.7 crore in the three months ended June, even as grounding of Boeing 737 MAX planes impacted the no-frills airline.
Amid uncertainty over exact time when operations of B737 MAX planes would start, the airline plans to induct 5-10 Boeing 737 NG aircraft and 3 Q400 aircraft during October 2019.
The carrier had a net loss of Rs 38.1 crore in the 2018 June quarter.
In the latest June quarter, the airline posted a total income of Rs 3,145.3 crore compared to Rs 2,253.3 crore in the corresponding period a year ago, according to a release.
About the latest results, the airline's Chief Financial Officer Kiran Koteshwar said it was the "highest ever profit in SpiceJet history" and that a key factor was the spectacular way in which 30 Boeing aircraft were inducted.
Operations "remained stressed" for a large portion of the June quarter due to continued grounding of B737 MAX planes.
This limited the airline's "ability to take its yields up owing to passenger disruptions and re-accommodation; while simultaneously increasing its fixed costs on this category of aircraft", the release said.
However, SpiceJet said the unprecedented situation was salvaged by operating additional flights with B737 NG and Q400 fleet. Further, 27 B737 NGs were inducted during the period between April 1 and June 15.
Generally, yield refers to average fare paid per passenger.
Operating revenues climbed to Rs 3,002.1 crore in the latest quarter, from Rs 2,220.4 crore in the year-ago period.
According to Koteshwar, average fare has increased by 11 per cent, while the fare situation is healthy and not discounted.
With respect to various costs related to Max planes, SpiceJet has recognised Rs 114.1 crore towards aircraft and supplemental lease rentals as other income.
"This is a part recognition of the total reimbursements, on which the company is working with the aircraft manufacturer, towards various ascertained costs and losses incurred by the company on this aircraft," the release said.
At the end of June, the airline's fleet size stood at 107 planes -- 73 B737 NGs, 31 Q400s and 3 B737 freighters.
"The company had estimated that the grounded Boeing 737 MAX aircraft to resume normal operations by July/ August 2019 as per the understanding with the aircraft manufacturer.
"With the current developments and uncertainty around the exact month of resumption, the company plans to cater to the winter season by inducting 5-10 Boeing 737 NG aircraft and 3 Q400 aircraft during October 2019," the release said.
B737 MAX aircraft was grounded in March days after such an aircraft operated by Ethiopian Airlines crashed near Addis Ababa, killing 157 people.
SpiceJet adopted the new accounting standard Ind AS 116 from April 1, whereby lease rentals are now reflected as interest and depreciation in the June quarter.
"Additionally owing to the retrospective treatment of this standard, there is a reduction of Rs 302.2 crore from retained earnings status as at April 1, 2019," the release said.
SpiceJet Chairman and Managing Director Ajay Singh said the results would have been vastly better but for the painful grounding of the Boeing 737 Max aircraft.
"We look forward to their swift return to service in the near future that will help SpiceJet increase its margins and provide a superior level of service," he noted.
Shares of the airline rose over 1 per cent to close at Rs 137.95 apiece on the BSE.
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