Low-cost airline SpiceJet expects the grounded Boeing 737 Max aircraft to get back to service in the first three months of 2021.
Return of the aircraft will be a 'big boost,' the airline said while announcing its fourth-quarter and full-year results for FY20.
Till then though, the grounded aircraft will continue to drag the company's operations, as seen in the results announced. “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," Chairman and Managing Director Ajay Singh said.
The airline has a fleet of 13 Boeing 737 aircraft. SpiceJet has a total order of 155 of these planes.
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Boeing was forced to ground its bestselling 737 Max aircraft in March 2019, after twin air crashes involving the plane led to the death of over 300 fliers.
Among Indian carriers, apart from SpiceJet, Jet Airways had also placed orders for the aircraft.
Claims and other incomeAt the same time, the grounded aircraft may have helped SpiceJet limit its losses for the fourth quarter and the full year.
"Company has initiated the process of claims on the aircraft manufacturer towards costs and losses, which are currently under discussion," Spicejet said. Consequently, it has 'recognised' Rs 671 crore as other income for the year-ended March 31. For the fourth quarter, other income because of this claim stands at Rs 135 crore.
"Based on current stage of discussions with, and considering the interim offer of compensation received from, the aircraft manufacturer, its own assessment and legal advice obtained by the company, the management is confident of collection of the above income," the airline added.
The adjustment has also led to a 'related foreign exchange gain on the restatement of these balances,' amounting to Rs 36 crore for Q4 and Rs 42 crore for FY20.
SpiceJet had reported a consolidated net loss of Rs 816.2 crore for Q4 FY20 against a profit of Rs 72.5 crore in the corresponding quarter of the preceding financial year.
The airline reported a net loss of Rs 934.8 crore in FY20 that includes a non‐cash loss of Rs 697 crore due to forex loss on the restatement of lease liability due to Ind‐AS 116.