COVID-19: SpiceJet Reports Net Loss Of ₹600.5 crores For Quarter End, CEO Singh Expects Speedy Recovery Post Lockdown

SpiceJet Airlines

With the flight operations remaining suspended for the most part of the quarter in the wake of the coronavirus outbreak, SpiceJet, a low-cost carrier, has reported a consolidated net loss of ₹600.5 crores for the quarter ended June 2020. In the same period last year, the company had posted a consolidated profit at ₹262.8 crores.

In the first quarter of 2020-21, the carrier reported consolidated income of Rs 711 crore as against Rs 3,149.63 crore in Q1 FY20, registering a year-on-year decline of 77.45 percent. the airline’s operating revenue fell significantly by 82.6% to ₹521 crores in Q1 FY21 versus Rs 3,002.85 crore in Q1 FY20.

Due to the increase in losses during the June quarter the financial position of the company has further decorated, while its current liabilities exceeded total assets. The company reported a negative net worth of Rs 2,170 crore, in the last quarter.

In the regulatory filing, SpiceJet mentioned the current operating environment on account of COVID-19 does not indicate the true comparison of the current results with those of the corresponding quarter last year.

The airline reported a consolidated EBITDA loss at Rs 193.2 crore as compared to an EBTIDA profit of Rs 620.8 crore in the same quarter of FY20

Auditors of SpiceJet have shown concerns over the recognition of Rs 141 crore as other income and related foreign exchange gain, claiming that the reported loss for the quarter would have been increased by the same amount if the company would have chosen to avoid considering such other income.

SR Batliboi and Associates LLP said, “In our view, there is no virtual certainty to recognize such other income and related receivable, as required by Ind-AS 37, ‘Provisions, Contingent Liabilities and Contingent Assets.”

Commenting on Q1 earnings, Ajay Singh, Chairman and Managing Director, SpiceJet said, “This is the worst-ever crisis to hit the aviation sector but I am pleased that SpiceJet continues to innovate and outperform the industry. Flight operations were suspended for most part of the quarter and the partial resumption of flights initially and the weak demand thereafter was a reminder of the significant problems that this pandemic has resulted in.”

Going ahead, Singh expects that there will be a significant improvement in the operating environment for airlines as more and more states would ease travel restrictions and business activity will get back to normal. “We are witnessing some early encouraging signs towards recovery,” he added.

In terms of operational parameters, SpiceJet claimed that it had the best passenger load factor amongst all airlines in the country during the quarter. The average domestic load factor for the quarter was 66.4 percent and the airline maintained its market share of above 16 per cent.

SpiceJet until now, has operated over 800 Charter and Vande Bharat flights with an intention of helping over 1,20,000 stranded Indian citizens. The Gurgaon-Headquartered airline has established itself as the country’s biggest cargo operator and operated more than 7000 flights and transported around 50000 tonnes of cargo since the nationwide lockdown started.

SpiceJet currently, is operating 47% of ore-covid schedule post restart operations along with a fleet of 13 cargo aircraft including two wide-body planes.

The company declared that it has launched long-haul wide-body cargo operations and the cargo network of the airline is spread over 63 domestic and 44 international ends.

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