Boeing 737 MAX plane grounding takes toll on SpiceJet’s books; loss widens in Q2

By: |
Updated: Nov 13, 2019 6:29 PM

Hit by the expenses in the form of grounding of Boeing 737 MAX planes and changes in accounting rules led to a rise in SpiceJet’s loss to Rs 462.6 crore in the three months ended September.

SpiceJet, Ajay Singh, industry news, IDFC First Bank,SpiceJet newsThe airline recorded a loss of Rs 389.4 crore in the corresponding period of the last year.

Hit by the expenses in the form of grounding of Boeing 737 MAX planes and changes in accounting rules led to widening of SpiceJet’s loss to Rs 462.6 crore in the three months ended September. The airline recorded a loss of Rs 389.4 crore in the corresponding period of the last year. In the second quarter of the ongoing fiscal, the airline reported operating revenue of Rs 2,845.3 crore as against Rs 1,874.8 crore in the same period a year ago.  With the grounding of Boeing 737 MAX, the company continues to incur various costs and losses with respect to these aircraft. The company is in the process of determining the costs and losses (including opportunity losses) incurred by it and has initiated the process of seeking reimbursements and claims from the aircraft manufacturer,” SpiceJet said in a statement. Indian Accounting Standard 116 or Ind AS-116 has come into force from April 1. It pertains to principles for recognition, presentation and disclosure of leases. Airlines mostly opt for sale and lease back of planes.

“The return of the 737 MAX will provide a huge boost to our operations and we are confident that with the rigorous scrutiny, the MAX will be one of the safest airplanes ever to fly,”     SpiceJet Chairman and Managing Director Ajay Singh said.

Also read: Retail inflation crosses RBI’s comfort level for first time in 16 months; CPI surges 4.62% in October

Meanwhile, Ajay Singh has pledged around 2.78 per cent shares towards securing a credit facility for the airline. A total of 1.67 crore shares were pledged in favour of IDFC First Bank Ltd on October 24, according to a filing submitted by the carrier. These shares, which account for 2.78 per cent shareholding, have been pledged to “secure a credit facility obtained by SpiceJet”, it added. With the latest pledge of shares, a total of 26.32 per cent shareholding of Singh is now encumbered.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Domestic gas prices to be cut 18% to $1.97/mmbtu: Care Ratings
2Govt forms five task forces to make Indian MSMEs future-ready: Secy
3Unacademy acquires UPSC test preparation platform Coursavy