COVID-19: SpiceJet posts a loss in Q4 on weak demand & suspension of flight operations

The airline reported a net loss of INR 934.8 crore in FY 2020 (that includes a non-cash loss of INR 697.0 crore due to forex loss on restatement of lease liability due to Ind-AS 116).

Operating revenues were at INR 2,863.9 crore for the reported quarter and INR 12,358.6 crore for the fiscal 2020.

On an EBITDA basis, loss was INR 223.6 crore for the reported quarter and profit of INR 1,273.9 crore for the fiscal 2020. On an EBITDAR basis, the loss is INR 90.9 crore for the reported quarter and profit of INR 1,636.8 crore for the fiscal 2020.

FY2020 posed multiple unprecedented challenges such as the COVID-19 pandemic and the world-wide grounding of the Boeing 737 MAX which led to the overnight grounding of SpiceJet’s MAX fleet.

On the grounded Boeing 737 MAX aircraft, the Company continues to incur various costs with respect to these aircraft and during this quarter ended March 30, 2020 on account of its inability to undertake revenue operations, the Company has recognized INR 134.5 crore towards aircraft and supplemental lease rentals and other identified expenses, as Other Income for the reported quarter.

This is a part recognition of the total reimbursements, on which the Company is working with the aircraft manufacturer, towards various ascertained costs and losses incurred by the Company on this aircraft.

Ajay Singh, Chairman and Managing Director, SpiceJet, said, “Two key factors that adversely impacted our performance and bottom line 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. Despite the year long grounding of the MAX aircraft, SpiceJet ran a profitable operation till COVID hit demand from mid-February. Indian and the global aviation industry are going through the toughest-ever phase in aviation history. We at SpiceJet have constantly adapted to the changing economic environment and I am happy that our cargo operations have performed very well. I am confident that things will only improve in the times to come. We remain cautious but optimistic about the future.”

In terms of operational parameters, SpiceJet had the best passenger load factor amongst all airlines in the country during the quarter and the year.

The average domestic load factor for the quarter was 90% while for fiscal 2020 it was 92%. For 58 months-in-a-row, SpiceJet has flown with over 90% load factors in the Indian aviation market.

After 13 years of being an integral part of SpiceJet, our CFO, Kiran Koteshwar, has decided to pursue an exciting opportunity overseas. He will remain with SpiceJet till August 31, 2020, and for a transition thereafter.

Since April 1, 2019, the airline has added 38 aircraft which included 737s, Q400s and freighters as it celebrated the big milestone of inducting its 100th aircraft – a Boeing 737.

SpiceJet consolidated its position at Mumbai Airport by shifting its operations from the Domestic Terminal (T1) to the state-of-the-art Terminal 2 (T2) at Chhatrapati Shivaji Maharaj International Airport.

During the lockdown, SpiceJet played a key role in keeping the country’s supply chain intact. On April 7, 2020, SpiceJet operated the India’s first cargo-on-seat flight carrying vital supplies in passenger cabin and belly space. Since then, the airline has been regularly deploying its B737 and Q400 passenger aircraft to carry cargo in the passenger cabin.

SpiceJet, the country’s largest cargo operator, has transported around 26,000 tonnes of cargo on more than 4650 flights since the lockdown began on March 25. SpiceXpress, SpiceJet’s dedicated cargo arm, in addition to handling its regular cargo business, also transported surgical supplies, sanitizers, face masks, coronavirus rapid test kits, IR thermometers etc. and providing doorstep deliveries of essential supplies, medicines and medical equipment to various cities in India during the lockdown period.

The airline also helped Indian farmers maintain continuity of supply chains by operating special cargo flights to take farm produce, fresh fruit and vegetables to various domestic and international destinations.

SpiceXpress’s international cargo network now spans over 41 international destinations that include Almaty, Abu Dhabi, Baghdad, Bahrain, Bangkok, Bishkek, Cambodia, Cairo, Cebu, Chad, Colombo, Dhaka, Doha, Dubai, Guangzhou, Ho Chi Minh, Hong Kong, Huangzhou, Incheon, Jakarta, Kabul, Kathmandu, Khartoum, Kyrgyzstan, Kuala Lumpur, Kuwait, Male, Myanmar, Shanghai, Singapore, Sharjah, Sulaymaniyah, Tashkent, Ukraine, among others.

Pioneer of India’s ‘Marine Krishi Udaan’, the airline introduced dedicated freighter services to boost India’s shrimp farming in February 2020.

Through SpiceXpress, the airline deployed its Boeing 737 aircraft on Chennai-Visakhapatnam and Surat-Kolkata routes, becoming the first to connect the cities through a freighter route.