 "SpiceJet")
Low-cost airline SpiceJet reported a net profit of Rs 197.6 crore for the first quarter of 2023-24 (FY24) after recording a net loss of Rs 6.2 crore on a consolidated basis in the last quarter of FY23 (Q4FY23).
The jump in net profit can be attributed to a 17 per cent decline in the company's total expenses from Rs 2504.7 crore in Q4FY23 to Rs 2069 crore in the first quarter of the current financial year. Moreover, the carrier also noted 30 per cent quarter-on-quarter (QoQ) reduction in the airline’s operating expenses which includes aviation turbine fuel (ATF), aircraft lease rentals, airport charges, among other expenses. The airline’s operating expenses stood at Rs 707.8 crore in Q1FY24, down from Rs 1,002.9 crore in Q4FY23.
It also witnessed a 9.2 per cent QoQ decline in its total income from Rs 2,498.5 crore in Q4FY23 to Rs 2266.8 crore in Q1FY23. On an annualised basis, the airline trimmed its losses from Rs 1,744 crore in FY22 to Rs 1,512.9 crore in FY23. Its total income rose 29.7 per cent in the same period from Rs 7,630.5 in FY22 to Rs 9,897 in FY23. Similarly, its expenses increased 22.7 per cent, from Rs 9297.3 crore in FY22 to Rs 11,410 crore in FY23.
“I am happy that despite facing multiple challenges, we have posted a profit in Q1 FY2024. Our team’s relentless efforts and dedication and the continuous support from our valued customers have been pivotal in this success. I firmly believe in the potential of our airline, and I am pleased to have contributed to its growth by infusing Rs 500 Crore into the Company. This infusion will help bolster our efforts in reviving our grounded planes, for which we have been working tirelessly, strengthening our fleet and expanding our cargo operations,” said Ajay Singh, Chairman and MD at SpiceJet.
The airline said it received disbursement of Rs 302.3 crore under the Emergency Credit Line Guarantee Scheme till March 2023. It also received Rs 341.2 crore under the same scheme by the end of Q1FY24.
Also Read
Additionally, the company added that it had initiated the process for issuing fresh equity/equity warrants to the promoter group for Rs 500 crore, and that it is further considering raising fresh capital through the issue of eligible securities. The company said that part of this amount will be utilised for the maintenance of its grounded fleet, which will contribute to the airline’s business once serviced. It noted that it plans to revive 25 of its planes into service. SpiceJet this month is scheduled to operate 1,266 flights per week, which is 41.5 per cent fewer services than in August last year, according to aviation analytics firm Cirium’s data.
However, auditor Walker Chandiok and Co in its report noted that the company’s accumulated losses stood at Rs 7274.7 crore which has resulted in ‘complete erosion of its (the company’s) net worth’.
It also noted that material uncertainties which include adverse foreign exchange rates, fuel prices, pricing pressures, and liabilities arising from various litigation settlements present significant doubt on the company’s ability to continue its business in the future.
The airline has been finding it difficult to make timely payments to its aircraft lessors. As on August 1, 26 out of its total 62 planes are grounded, according to Cirium's data.
In May, the National Company Law Tribunal (NCLT) issued a notice to SpiceJet on a petition filed by aircraft lessor Aircastle (Ireland) seeking initiation of insolvency resolution proceedings against the airline.T he lessor had filed a plea over unpaid dues for an order amounting to Rs 49 crore.
Wilmington Trust, an affiliate of Aircastle and one of the airline’s aircraft lessors, also moved the NCLT to initiate an insolvency process against the airline for non-payments of dues in June.
Moreover, Kal Airways and its promoter Kalanithi Maran moved the Delhi High Court seeking 50 per cent of the daily revenue collection Spicejet to be paid on a weekly basis. As of August 3, the amount to be paid by the airline to Maran stood at Rs 393 crore.
Additionally, the low-cost carrier this month sought approval from its shareholders for aircraft lessor Carlyle Aviation Partner to acquire a 5.91 per cent stake in the airline at Rs 48 per share. The airline said that the lessor will get these shares upon conversion of its existing outstanding dues worth $28.16 million. SpiceJet had said it had restructured $100 million outstanding dues to Carlyle, following which the lessor will pick 7.5 per cent stake in the airline, Business Standard reported this month.
SpiceJet’s board had deferred the release of Q4FY23 and Q1FY23 results for today after the company could only ‘partially complete the agenda items’ listed during its August 11 board meeting.
