SpiceJet reports ₹807 crore loss for March quarter on pandemic disruptions

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Muted travel demand due to the coronavirus pandemic and grounding of its Boeing 737Max planes led low-fare airline SpiceJet Ltd to report a net loss of ₹807 crore for the March.

Five analysts polled by Bloomberg had estimated net loss at ₹687 crore.

The airline had reported a net profit of 56.3 crore in the year-ago period.

SpiceJet’s revenue for the March quarter, however, exceeded analysts’ expectations at ₹3,057.34 crore and was higher than ₹2571.83 crore reported a year ago.

Total expenses during the period under review rose 53.6 % to ₹3,864.42 crore.

“Two key factors that adversely impacted our performance and bottomline was the covid-19 pandemic that started affecting demand adversely from mid-February and grounding of the 737 MAX, which has been out of service for over a year now,” Ajay Singh, chairman and managing director of SpiceJet, said in a statement.

SpiceJet said it continues to incur various costs for its grounded Boeing 737MAX planes. During the quarter ended March, the company recognised ₹134.5 crore towards aircraft and supplemental lease rentals and other identified expenses, as other income for the reported quarter.

“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,” it said.

The airline currently has a fleet of 74 Boeing 737, 29 Bombardier Q-400s, eight B737 & Bombardier Q-400 planes.

Auditors of the airline SR Batliboi & Associates LLP, in a note, said the company would have reported a wider loss for the March quarter but for other income and foreign exchange gains.

“In our view, there is no virtual certainty to recognize such other income and related receivable,” the auditor said. “Had the Company not recognized such other income (including its related foreign exchange restatement), the reported loss for the quarter and year ended March 31, 2020 would have been Rs. 978.31 crore and ₹1,649.30 crore respectively, and accumulated losses as at March 31, 2020 would have been higher by ₹714.53 crore.”

Full-year loss was at ₹934.76 crore for 2019-20 compared with a loss of ₹316.08 crore in fiscal 2019. Revenue rose 42.65% to ₹13,206.42 crore.

Indian airlines are staring at a revenue loss of ₹1.3 trillion between fiscal 2020 and 2022 due to the covid-19 pandemic that has severely hit demand, rating agency Crisil had said in a report earlier in July.