SpiceJet accumulated losses hit Rs 6,700 crore | The Financial Express

SpiceJet accumulated losses hit Rs 6,700 crore

The airline’s current liabilities exceed its current assets by Rs 6,691.2 crore, the auditors have noted. The SpiceJet stock crashed more than 14% in early trades on Thursday before ending the session at Rs 44.95, down 3.13%.

SpiceJet accumulated losses hit Rs 6,700 crore
Despite a reasonably good recovery in passenger demand in the past few months, SpiceJet’s market share fell to 8% in July, its lowest levels in at least 14 months. The carrier’s market share was 10.7% in February.

With losses of Rs 1,721.9 crore in FY22 and Rs 787.9 crore in the June quarter, SpiceJet’s accumulated losses touched Rs 6,700.5 crore at the end of June, resulting in a further erosion of the company’s net worth, the firm’s auditors have said.

The airline’s current liabilities exceed its current assets by Rs 6,691.2 crore, the auditors have noted. The SpiceJet stock crashed more than 14% in early trades on Thursday before ending the session at Rs 44.95, down 3.13%.

The company has said it is looking to raise additional funds from banks under the ECLGS 3.0 extension scheme. The board has also approved a fresh capital raise through issue of eligible securities; there is talk of raising $200 million of equity capital, possibly through a stake sale. SpiceJet’s promoter Ajay Singh and his family hold 59.4% stake in the airline.

Also Read: SpiceJet’s losses widen; CFO quits

Despite a reasonably good recovery in passenger demand in the past few months, SpiceJet’s market share fell to 8% in July, its lowest levels in at least 14 months. The carrier’s market share was 10.7% in February.

The aviation sector has been through a difficult time in the last two years following the outbreak of Covid-19. Spicejet’s revenues in the March quarter at Rs 1,865 crore were flat year-on-year. However, revenues during the April-June period of Rs 2,457 crore, more than doubled from Rs 1,090 crore y-o-y.

Elevated aviation turbine fuel (ATF) prices and a depreciating rupee have been a double whammy for carriers. The SpiceJet management said on Wednesday ATF prices rose around 105% y-o-y in April-June period. Details of the airline’s ASKM (available seat miles per km) and yields have not been made available for the April-June quarter.

Meanwhile, employees have claimed their salaries are being delayed for the second consecutive month. Moreover, they claimed salaries of captains and first officers had not been reversed to even 50% of the pre-pandemic levels. The SpiceJet management has asserted salaries are being credited in a graded format.

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