SpiceJet logs loss of ₹731.12 cr in Q1 as travel demand dips
Premium- The Gurugram-based carrier said its operations were significantly hit by the continued impact of covid-19, which affected travel demand during the June quarter
New Delhi: SpiceJet Ltd on Friday reported its sixth consecutive quarterly loss at ₹731.12 crore during the three month period that ended on 30 June. This is primarily because of the impact of second wave of covid-19 during the quarter, which led to a massive decline in passenger traffic.
The Gurugram-based carrier said its operations were significantly hit by the continued impact of covid-19, which affected travel demand during the June quarter.
The airline’s consolidated net loss widened by 21.75% from ₹600.52 crore during the year-ago period. Its consolidated revenue rose 83% from a year earlier to ₹1,294.99 crore. However, this comes against the backdrop of domestic flight operations being suspended between March and May 2020 by the government to contain the spread of coronavirus.
Expenses also rose by 55% on an annual basis to ₹2,026.10 crore during the June quarter.
“The last five quarters have been the most difficult phase ever for SpiceJet as aviation remained the worst‐hit sector during the second wave as well. Q1 (April-June 2021) was severely impacted by the second wave as passenger traffic almost disappeared," said Ajay Singh, SpiceJet chairman and managing director. “While no one can predict the future, with vaccination numbers picking up and demand for air travel increasing steadily, we hope the trend reverses soon," he said.
Meanwhile, Walker Chandiok & Co LLP, the auditors of SpiceJet, have once again raised doubts about the airline’s ability to continue as a going concern as mounting losses have led to complete erosion of net worth, with current liabilities exceeding current assets by ₹6,044.91 crore as of 30 June 2021.
“These conditions, together with uncertainties relating to the impact of the ongoing covid-19 pandemic on the operations of the company.... indicate the existence of a material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern," it said.
SpiceJet also reported other income of ₹169.99 crore, which includes compensation from Boeing Co. for the grounding of 737Max planes. The airline is, however, yet to receive a substantial portion of the compensation from Boeing in the form of cash.
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