Low-cost airline SpiceJet posted a standalone net profit of ₹204.56 crore for the quarter ended June 2023. This achievement was in stark contrast to the net loss of ₹788.83 crore in the same period the previous fiscal.
However, the auditors, Walker Chandiok & Co LLP, red-flagged SpiceJet’s accumulated losses which had reached a substantial amount, leading to doubts about its ability to continue operations. Despite such uncertainties, the management expressed confidence in its ability to negotiate settlements, raise funds and achieve profitability.
SpiceJet’s standalone revenue from operations in the quarter witnessed an 18.5 per cent decline, totlaling ₹2,001.74 crore compared to ₹2,456.76 crore in the corresponding period of the previous year. On a consolidated basis, the airline reported a net profit of ₹197.63 crore for the quarter, a remarkable improvement from the net loss of ₹783.62 crore during the same period last year.
The auditors’ note emphasised that while accumulated losses had eroded the company’s net worth, the management’s assessment of future business prospects and mitigation strategies justified the use of the going concern basis for financial reporting.
SpiceJet’s achievements extended beyond financial figures. The airline boasted the industry’s highest domestic load factor of 90 per cent in Q1, and its Passenger RASK (revenue per available seat-kilometer) increased by 26 per cent. This growth was attributed to a 22 per cent increase in yield and a 4 per cent boost in load factor.
To further support its operations and growth plans, Ajay Singh, Chairman and Managing Director of SpiceJet, infused ₹500 crore into the company. The investment is aimed at reviving grounded aircraft, strengthening the fleet and expanding cargo operations. Singh expressed his belief in the airline’s potential and commitment to its growth.
Notably, SpiceJet’s delayed announcement of its earnings for the quarter ended March 2023 revealed a consolidated net loss of ₹6.2 crore, a slight increase from the net loss of ₹1.47 crore in the same period the previous year. However, the total revenue from operations for the January-March 2023 quarter rose to ₹2,145 crore from ₹1,870.5 crore in the corresponding period.