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SpiceJet posts Rs 600.5 crore net loss in Q1 amid COVID-19 lockdown, finances deteriorate

For the April-June quarter of FY21,SpiceJet 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 per cent

Chitranjan Kumar | September 15, 2020 | Updated 21:53 IST
SpiceJet posts Rs 600.5 crore net loss in Q1 amid COVID-19 lockdown, finances deteriorate
SpiceJet had a negative net worth of Rs 2,170 crore as of June 30, 2020

SpiceJet has reported consolidated net loss of Rs 600.5 crore for the April-June period of the current fiscal as flight operations remained suspended during the most part of the quarter in wake of nationwide lockdown to contain the spread of the coronavirus. The low-cost carrier had posted consolidated net profit of Rs 262.8 crore in the same quarter last year.

For the April-June quarter of FY21, 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 per cent. Operating income fell sharply by 82.6 per cent YoY to Rs 521 crore in Q1 FY21 versus Rs 3,002.85 crore in Q1 FY20.

The financial position of the company has further detoriated due to rise in losses during the June quarter while its current liabilities exceeded total assets. As of June 30, 2020, SpiceJet had a negative net worth of Rs 2,170 crore.

"The present operating environment on account of COVID-19 though does not reflect the true comparison of the current results with those of corresponding quarter last year," SpiceJet said in the regulatory filing.

The Gurgaon-headquartered airline reported consolidated EBITDA loss at Rs 193.2 crore as compared to EBTIDA profit of Rs 620.8 crore in the same period last year.

Also Read: Can SpiceJet stay afloat? Auditors worry after record quarterly loss of Rs 807 crore

SpiceJet's auditors have raised concerns over recognition of Rs 141 crore as other income and related foreign exchange gain, saying that the reported loss for the quarter would have been higher by the same amount if the company had not considered such other income.

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

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.

"I expect our cargo business to continue to expand in the coming quarters. I am also encouraged by the progress made in the re-entry of Boeing's Max aircraft into service," he further stated.

Also Read: SpiceJet FY20 results: Airline reports net loss of Rs 935 crore due to COVID-19, grounding of Boeing 737 MAX

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 per cent and the airline maintained its market share of above 16 per cent.

Till date, SpiceJet operated over 800 charter and Vande Bharat flights to help repatriate more than 1.2 lakh stranded Indian citizens from foreign countries. It also operated more than 7,000 flights and transported around 50,000 tonnes of cargo since March 25, 2020. Out of these flights, 40 per cent were to international destinations.

At the end of June quarter, SpiceJet fleet included 74 Boeing 737s and 26 Bombardier Q400s. It also has 11 Boeing 737 and Bombardier Q-400 freighters.  

The airline's board also allotted 1,68,750 equity shares of the company of face value of Rs 10 each under Employee Stock Option Scheme - 2017.

Ahead of Q1 result, SpiceJet shares settled 0.19 per cent higher at Rs 53.40 apiece on the Bombay Stock Exchange. 

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