SpiceJet posts net loss for sixth consecutive year amid ongoing cash crunch

SpiceJet airline on Monday reported a 72.4 per cent year-on-year (YoY) reduction in its consolidated net loss to Rs 418.3 crore, amid ongoing cash crunch. This marks the sixth consecutive year the airline has posted a loss.

The budget airline was last in the green in 2017-18, when it posted a consolidated net profit of Rs 557.4 crore. The airline said: "Losses over the last few years have been primarily driven by adjustments on account of the implementation of Ind AS 116 (new accounting standard that came into force in 2019), adverse foreign exchange rates, operational disruption during COVID-19 followed by sub-optimal operations due to liquidity constraints faced by the Group."

 

SpiceJet said that due to its operational and financial position, it has deferred payments to various parties, including lessors, vendors, and statutory authorities. Five years back, SpiceJet was operating about 4,000 flights per week. Currently, the airline is operating just about 1,154 flights per week, according to Cirium.

The airline on Monday also issued its third quarter and fourth quarter results for 2023-24. SpiceJet's consolidated net loss in the third quarter of 2023-24 stood at Rs 297.2 crore, which was in contrast to the net profit of Rs 112.1 crore it had posted in the corresponding period of 2022-23.

The airline posted a consolidated net profit of Rs 127.4 crore in the fourth quarter of 2023-24. In the corresponding period of 2022-23, the airline had posted a net loss of Rs 124 crore.

Certain aircraft lessors have filed applications under section 9 of the Insolvency and Bankruptcy Code, 2016, against SpiceJet due to non-payment of dues. On this issue, SpiceJet said: "The company has certain disputes in the matter and the amounts claimed are not debts and accordingly the company is defending such matters. Based on the review of applications filed and the legal interpretation of the law supported by views of a legal expert, the management is of the view that there are fair chances of having a favourable outcome for the company."

Ajay Singh, Chairman and Managing Director, SpiceJet, said that the net profit in Q4 of 2023-24 reflects the company's "relentless" efforts to enhance operational efficiency and its commitment to turning around its fortunes.

“We are confident that SpiceJet is well-positioned to soar even higher in the coming quarters. As we move forward, we are exploring opportunities to raise fresh funds to further bolster our growth plans and take advantage of the burgeoning demand in the Indian aviation market. We are confident that with our robust strategy and dedicated team, we will continue to soar to new heights and create value for our stakeholders," he added.