SpiceJet flies back into the red with April-June net loss rising to Rs 789 crore

SpiceJet Ltd fell back into the red in the fourth quarter of 2021-22 (Q4FY22) and in the first quarter of 2022-23 (Q1FY23). The airline reported a net loss of Rs 458 crore and Rs 789 crore, for the quarters ended March and June, respectively.

The low-cost carrier, which reported its Q4FY22 and Q1FY23 results on August 31, had reported a profit of Rs 23 crore in the third quarter of 2021-22 and a loss of Rs 235 crore in the quarter ended March 2020-21 and a loss of Rs 729 crore in the first quarter of 2021-22.

SpiceJet had delayed announcing the results of its fourth quarter in 2021-22 due to a ransomware attack.

The total revenue from operations for the January-March quarter came in at Rs 1,865 crore, slightly lower than Rs 1,877 crore reported in the year-ago quarter.

Similarly, the airline's revenue from operations for the April-June period came in at Rs 2,457 crore, more than double when compared to Rs 1,090 crore in the same period a year ago.

"The industry has been witness to one of the most severe operating environments in the recent past which impacted the progress and recovery made in Q3FY2022. Record high ATF prices and depreciating Rupee were the major contributors," the airline's chairman and managing director Ajay Singh said in a press release.

The airline said that aviation turbine fuel prices rose around 105 percent in April-June as compared to the same quarter last year, which impacted its financial performance.

The airline said that its passenger Revenue per Available Seat-Kilometer (RASK) rose by 80 percent in April-June when compared to the same quarter last year. While passenger RASK rose only 11 percent in Jan-Mar when compared to a year ago.

Similarly, the carrier's Available seat miles (ASKM) rose 11 percent on-year in the January-March quarter while yields improved 5 percent on year in the quarter. The airline did not share its ASKM and yield for April-June.

SpiceJet's net loss after excluding forex restatement impact came in at Rs 420 crore.

The airline has incurred a one‐time exceptional adjustment of Rs 259 crore on account of a settlement with Boeing.

The settlement with Boeing was a significant event during the quarter. As expected, the company received cash and non‐cash accommodations in excess of the amounts due to lessors during the period of grounding of MAX aircraft, SpiceJet said.

However, in the April-June period, the one-time exception on account of a settlement with Boeing fell to a mere Rs 21.6 crore.

On Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) basis, SpiceJet reported a loss of Rs 379 crore in Apr-Jun.

However, on an Earnings Before Interest, Taxes, Depreciation, Amortization, and Rent (EBITDAR) basis, the company reported a profit of Rs 57 crore in Apr-Jun.

SpiceJet said it has the highest passenger load factor amongst all airlines in the country.

"Our average domestic load factor for the quarter ending 31st March 2022 was 83.3% while for FY2022 it was 80.4%. SpiceJet had the highest PLF of 86.43% in Q1FY2023," the airline said.

The airline's employees' costs in January-March fell to Rs 19.43 crore, while employee costs came in at Rs 21.63 crore for April-June. SpiceJet's employee costs stood at Rs 21.32 crore in the Jan-Mar quarter a year ago.

Despite a rise in employee costs in April-June, the airline's employees have been at loggerheads with the airline over salaries.

SpiceJet employees on August 31 alleged a delay in the disbursal of salaries for the second straight month, with the budget airline saying the payments were being made in a ''graded format''.

''The salary disbursal was timely for June. Also, the salaries are yet to match the pre-COVID-19 levels. The salaries being disbursed to captains and first officers are not even 50 percent of what they used to be before the pandemic outbreak in March 2020,'' an employee told PTI.

However, SpiceJet claimed it has started salary disbursal in a ''graded format''.

''We have started crediting salaries from today. Like the previous month, salary will be credited in a graded format,'' the airline said in a statement.

In an internal communication on August 31, SpiceJet's Human Resources team informed employees about the delays citing that the ''previous few months have been difficult'' due to ''superlative fuel price hike'' and also ''historically lean period of July-September''.

The struggling airline is also looking to raise funds to stay afloat.

"We are optimistic about our future and our continued recovery and in order to achieve our future plans the Board has mandated fresh capital issuance and the Company will be shortly engaging with investment bankers for a potential raise of up to US $200 million," Singh said in a press release.

SpiceJet is also said to be in talks with potential investors for a likely stake sale in the airline.

SpiceJet’s promoter Ajay Sigh and his family hold 59.4 percent shares in the airline. The balance is public shareholding, including through individuals with a nominal share capital of either up to Rs 2 lakh (25.86 percent) or in excess of Rs 2 lakh (8.93 percent).

The low-cost carrier also said that its chief financial officer Sanjeev Taneja has resigned with immediate effect.

Taneja's resignation comes at a time when the airline has been struggling with customer confidence due to a series of mid-air incidents and widening losses.

He was appointed the CFO of SpiceJet in November 2020 during the COVID-19 pandemic.

Taneja previously worked with Mumbai International Airport and Essar port. He had replaced Kiran Koteshwar who resigned from SpiceJet to join Nigeria-based Green Africa Airline.