Impact of COVID-19 on SpiceJet Q1 Results -posts loss due to flight suspension
*Cargo revenue more than doubles
*Company launches aggressive cost reduction plan
SpiceJet, India’s favourite airline and the largest air cargo operator, reported a net loss of INR 593.4 crore in the first quarter of FY21 against a profit of INR 261.7 crore in the same quarter of the previous year as flight operations remained suspended for most part of the quarter following the nationwide lockdown.
Operating revenue was INR 514.7 crore for the reported quarter as against INR 3,002.1 crore in the same quarter last year. For the same comparative period, operating expenses were INR 1303.2 crore as against INR 2,887.2 crore. On an EBITDA basis, loss was INR 11 crore for the reported quarter as against profit of INR 747.5 crore for the corresponding quarter last year. On an EBITDAR basis, the profit was INR 13.5 crore for the reported quarter as against profit of INR 812.1 crore for the same quarter last year. The present operating environment on account of Covid-19 though does not reflect the true comparison of the current results with those of corresponding quarter last year.
Ajay Singh, Chairman and Managing Director, SpiceJet, said, “This is the worst-ever crisis to hit the aviation sector but I am pleased that SpiceJet continues to innovate and outperform the industry. Flight operations were suspended for most part of the quarter and the partial resumption of flights initially and the weak demand thereafter was a reminder of the significant problems that this pandemic has resulted in.”
“As expected, Team SpiceJet showed remarkable resilience to deal with a crisis situation, once again. Our performance during the last six months clearly signifies our positive attitude and our ability to find opportunity in adversity. This has seen us quickly bounce back with industry best load factors and emerge as India’s number one cargo company. I am confident that as more and more States ease travel restrictions and business activity gets back to normal there will be a significant improvement in the operating environment for airlines and we are witnessing some early encouraging signs towards recovery. I expect our cargo business to continue to expand in the coming quarters. I am also encouraged by the progress made in the re-entry of Boeing’s Max aircraft into service.”
In terms of operational parameters, SpiceJet had the best passenger load factor amongst all airlines in the country during the quarter. The average domestic load factor for the quarter was 66.4% and the airline maintained its market share of above 16% despite the impact of Covid-19 thus demonstrating robust operating parameters.