Ajay Singh’s budget airline SpiceJet reported a net loss of well over Rs 800 crore for fiscal fourth quarter January-March, as coronavirus took toll on passenger traffic.
Ajay Singh’s budget airline SpiceJet reported a net loss of well over Rs 800 crore for fiscal fourth quarter January-March, as coronavirus took toll on passenger traffic. However, coronavirus and the two-months long lockdown are not the only reasons behind the airline’s dull performance. “Two key factors that adversely impacted our performance and bottom line 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, SpiceJet, said. The Boeing 737 MAX aircraft was grounded across the globe in the start of 2019 due to a tragic plane crash. SpiceJet continues to incur losses on the account of grounded 737 MAX aircraft.
Key takeaways from Q4 results
- SpiceJet reported operating loss to the tune of Rs 333.7 crore in the January-March quarter. The airline also reported a non-cash Ind-AS 116 impact of Rs 473.4 crore taking the net loss to Rs 807.1 crore. The airline had reported net profit of Rs 56.3 crore in the same period last year.
- The budget carrier said that it witnessed a revenue from operations jump by 13% despite the general weak demand prevalent in the aviation industry.
- The airline, which ramped up its cargo services amid weak passenger demand said that its revenue from cargo increased by 94%.
- SpiceJet reported an EBITDAR of Rs 1,636.8 crore for the full financial year 2019-20.
The aviation industry is one of the worst hit sectors due to the coronavirus pandemic in both India and the globe as tourism and business related travels remain downbeat. However, SpiceJet said that it has found an “opportunity” in air cargo and ramped up its cargo operations. “Indian and the global aviation industry are going through the toughest-ever phase in aviation history. We at SpiceJet have constantly adapted to the changing economic environment and I am happy that our cargo operations have performed very well,” Ajay Singh said. Meanwhile, the company remains cautiously optimistic of the future even as coronavirus cases are on a spike in the country and the government is yet to open international travels.