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SpiceJet net loss rises to ₹789 crore, CFO resigns

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SpiceJet, which is facing headwinds, reported on Wednesday an increase in net loss to Rs 789 crore in the June quarter as high fuel prices and depreciation of the rupee negatively impacted the budget carrier.



Amid the financial turmoil, the airline plans to raise USD 200 million, which is approximately Rs 1,600 crore at current exchange rates, and expects to complete the spin-off of its profitable cargo business into a separate company in the current quarter.

In continuing misery for the airline, aviation watchdog DGCA issued two more on Wednesday Boeing 737 aircraft from SpiceJet, after non-payment of contribution to landlords. With the last deregistration, a total of six Boeing 737 aircraft of the budget airline were deregistered in August.

The crisis-stricken airline has also postponed the payment of salaries to its staff for the second month in a row. However, SpiceJet said it has started crediting salaries from today and like last month “salary will be credited in a classified format”.

In addition, the independent auditor’s review of the airline’s latest quarterly results noted that there are indications of material uncertainties “which could cast significant doubt on the group’s ability to continue as a going concern”.

On Wednesday, the airline also said its Chief Financial Officer Sanjeev Taneja has resigned.

The low-cost carrier had a net loss of Rs 729 crore in the quarter ended June 2021. In the last quarter of June, the net loss was Rs 420 crore excluding forex adjustment.

“Total revenue for the reported quarter was Rs 2,478 crore versus Rs 1,266 crore, a year-over-year growth of 126 percent, in the same quarter of the previous year,” the airline said in a release.

The airline, which had postponed its earnings for March and FY2022, saw its net loss rise to Rs 458 crore in the 2022 quarter from Rs 235.3 crore in the same period a year ago.

For the full fiscal year 2021-22, the net loss increased by 73 percent to Rs 1,725 ​​crore from Rs 998.30 crore in the comparable period.

Business was hit hard by the third wave of the coronavirus pandemic and high fuel prices in the March quarter, according to the airline.

SpiceJet Chairman and CEO Ajay Singh said the industry witnessed one of the most severe business environments in the recent past, impacting progress and recovery in the third quarter of FY2022.

In the June quarter, jet fuel prices rose 105 percent year-on-year and 40 percent on a sequential basis, the airline said.

“We are optimistic about our future and our continued recovery and in order to realize our plans for the future, the board of directors has ordered new capital issuance and the company will soon be in talks with investment bankers for a possible increase of up to USD 200 million,” said he. said.

The cargo arm of the airline SpiceXpress was in the black during the first quarter of the current fiscal year. It reported a net profit of Rs 18 crore.

Freight revenues increased by 74 percent to Rs 1,944 crore in FY2022.

“We will shortly complete the divestiture of the cargo business in a separate independent company, SpiceXpress, in the current quarter, which will be followed by capacity expansion with additional cargo aircraft in FY2023,” said Singh.

Meanwhile, certain concerns have been identified in the independent auditor’s report on the company’s quarterly results.

“…the group has incurred a net loss (after other comprehensive income) of Rs 7,827.82 million during the quarter ended June 30, 2022 and as of that date, the group’s accumulated losses amount to Rs 67,471.11 million, which has led to complete erosion of its net worth and current liabilities exceeded its current assets by Rs 67,719.67 million on June 30, 2022,” it said.

According to the report, these terms and other matters indicate the existence of material uncertainties that could cast significant doubt on the Group’s ability to continue as a going concern.

Singh said that despite the complex work environment and the highest input costs ever, SpiceJet has been able to sustain its operations.

“Last year was a period of restructuring and settlement, and we successfully completed and implemented settlements with most of our key partners, including manufacturers and lessors, paving the way for our seamless growth and expansion.

“As we move forward, we are encouraged by strong travel demand and our focus for the next year would be to introduce more fuel-efficient Boeing 737-8 MAX aircraft and focus on our regional and international routes,” he added. ready.

SpiceJet has been going through turbulent times in recent months, including financial headwinds. In July, the regulator ordered the airline to operate only 50 percent of its flights in the wake of many of its planes experiencing technical problems.

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