SpiceJet's net loss for the quarter that ended September 2023 would have been even higher if not for a 75 percent fall in its foreign exchange loss of Rs 34.88 crore during the quarter compared to the same period last year
After reporting profit in the first quarter of 2023-24, low-cost carrier SpiceJet reported a net loss of Rs 431.54 crore in the second quarter of 2023-24.
The airline's board, on December 12, approved the company's financial results for the quarter September 2023 with the airline posting a net loss of Rs 431.54 crore compared to a net loss of Rs 837.8 crore in the same period a year ago.
The Gurugram-based airline reported a net profit of Rs 197.53 crore for the April-June period.
Revenue from operations fell 27 percent to Rs 1,425.29 crore, from the year-ago period when the airline had reported a top line of Rs 1,952.61 crore.
The fall in revenue was despite a sharp rise in domestic travel during the quarter as demand for domestic travel in India has continued to surge for the past three quarters.
In Q2FY24, SpiceJet carried 15.90 lakh passengers, commanding a market share of 4.3 percent. Last year, during the same period, the carrier carried 23.28 lakh passengers commanding a market share of 7.7 percent.
In the pre-pandemic year of 2019, SpiceJet had carried 53.87 lakh passengers during Q2 securing a market share of 15.3 percent.
Sequentially, the low-cost airline had reported a profit of Rs 197.53 crore on sales of Rs 2,003.5 crore in Q1 FY24.
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In a statement, the airline said that its passenger revenue per available seat-kilometre (RASK) rose by 11 percent in July-September from the year-ago quarter due to an increase in yield by 8 percent on-year and a 3 percent on-year rise in load factor during the quarter.
The airline did not share its available seat miles (ASKM) for the quarter.
SpiceJet's net loss for the quarter September 2023 would have been even higher if not for a 75 percent fall in its foreign exchange loss of Rs 34.88 crore during the quarter compared to the same period last year. The company had incurred a foreign exchange loss of Rs 137.62 crore in the same period last year.
The airline said it has the highest passenger load factor among all airlines in the country.
"In the face of these challenges, SpiceJet emphasises its commitment to operational efficiency, customer service and strategic decision-making to navigate the complexities of the aviation landscape. The airline continues to explore avenues for growth and profitability in the evolving market and the fresh infusion of over Rs 2,250 crore in the company will bring renewed energy to adapt to the changing circumstances," SpiceJet Chairman Ajay Singh said.
Fund Infusion
The board of low-cost carrier SpiceJet on December 12 approved the proposal to raise Rs 2,254 crore through the issue of up to 130 million convertible warrants and 320.8 million fresh equity shares at an issue price of Rs 50 each.
SpiceJet will issue convertible warrants to 64 allottees, including Prabhudas Lilladher Advisory Services, LKP Finance, Martina Developers, and Fincon. The issue price of Rs 50 is 18.4 percent lower than the SpiceJet stock price of Rs 61.3 when markets ended on December 11.
Following the announcement of its plans to raise funds and its financial results for the second quarter, the shares of the airline went down 9.7 percent from Rs 61.49 to Rs 55.5 on December 12.
"The proposed preferential issues comprise of investors like Elara India Opportunities Fund, Aries Opportunities Fund, Mahapatra Universal Limited, Nexus Global Fund, Prabhudas Lilladher, Resonance Opportunities Fund and many more for issuance of equity shares and equity warrants aggregating to over INR 2,250 Crore," the airline said in a press release.
SpiceJet’s market capitalisation stands at Rs 4,000 crore. Promoters, led by Singh, hold a 56.5 percent stake in the company, and, out of this, 37.9 percent is pledged with various lenders.
"We are confident that this capital raise will help us achieve our goal of building a world-class airline in India. I thank all our stakeholders, all those who work for SpiceJet and all those who work with SpiceJet and who have patiently waited for this day. They have allowed us the time and opportunity to overcome a difficult phase in our history, and we are grateful to them,” Singh said.
Singh had also pumped Rs 500 crore into the company in August.
"I firmly believe in the potential of our airline, and I am pleased to have contributed to its growth by infusing Rs 500 crore into the company. This infusion will help bolster our efforts to revive our grounded planes, for which we have been working tirelessly, strengthening our fleet and expanding our cargo operations," he said in a press release.
The cash-starved airline has only a part of its fleet operational with a poor one-time performance from nearly 40-45 percent flight delays every day.
Market experts say that SpiceJet had a large number of denied boarding as the airline overbooked many flights, or cancelled and combined flights which led to overbooking.
According to data from the Directorate-General of Civil Aviation (DGCA), between May 2023 and October 2023, 189,634 passengers were affected by delays of beyond two hours on SpiceJet's flights. The airline paid Rs 3.78 crore in compensation to the passengers in this period.
During the same period, SpiceJet wrongly denied boarding to 991 passengers and paid Rs 18.11 lakh in damages. Similarly, around 16,131 passengers were affected by flight cancellations and the airline paid Rs 1.33 crore as compensation.
Despite all the headwinds, the airline's stock zoomed around 70 percent in the past six months.
SpiceJet Q2 results: Airline flies back into red with net loss of Rs 431.54 crore - Moneycontrol
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