SpiceJet plane.
Credit: PTI File Photo
Budget carrier SpiceJet Ltd swung back into black during the first quarter of fiscal year 2024 after registering losses in the previous quarter as the cash-strapped airline announced the earnings for the two quarters together on August 14.
The Gurugram-based airline reported a consolidated net profit of Rs 197.64 crore for the quarter that ended June 30, 2023, marking a significant turnaround from the previous year in which the airline had incurred a net loss of Rs 783.72 crore. On a standalone basis, PAT (Profit After Tax) for Q1FY24 stood at Rs 205 crore which is reportedly the highest quarterly profit in four years.
It reported a net loss of Rs 6.20 crore in the fourth quarter of the previous fiscal year ended March 2023 (Q4FY23) against a loss of Rs 485 crore in the same quarter last year.
The profit came on the back of “strong demand for air travel in India", the company said in a release. The surge in net profit can be attributed to about 17% reduction in the company's total expenses, which dropped from Rs 2,504.7 crore in Q4FY23 to Rs 2,069 crore in Q1FY24.
The carrier reported a 36% year-on-year decline (from Rs 3,257.93 crore in June 2022) in its operating expenses, encompassing aviation turbine fuel (ATF), aircraft lease rentals and airport charges among other costs. Interestingly, the airline's aviation turbine fuel cost almost halved on a year-on-year basis from Rs 599.22 crore in FY22 to Rs 375.57 in FY23 while its overall operating expenses for Q1FY24 amounted to Rs 707.8 crore, a significant drop from Rs 1,002.9 crore in Q4FY23. It is to be noted that a fourth of its fleet has been grounded since early last financial year.
SpiceJet’s revenue rose 12.8% year-on-year to Rs 2,145 crore compared with Rs 1,871 crore in the March 2022 ended quarter. The consolidated revenue slipped about 19% on a year-on-year basis to Rs 2,004 crore as against Rs 2,457 crore in the first quarter of the previous fiscal.
Standalone earnings before interest, taxes, depreciation and amortization (EBITDA) in Q1FY24 was at Rs 525 crore against an EBITDA loss of Rs 393 crore in Q1FY23.
The board of SpiceJet deferred the release of Q4FY23 and Q1FY23 results for August 14 citing only partial completion of the agenda items listed during its Friday board meeting.
The airline claimed to have posted the industry’s highest domestic load factor of 90% in Q1, while its passenger RASK (Revenue per Available Seat-Kilometer) surged by 26% on the back of an increase in yield by 22% and load factor by 4%.
“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 in reviving our grounded planes, for which we have been working tirelessly, strengthening our fleet and expanding our cargo operations," said Ajay Singh, chairman and managing director of SpiceJet.
SpiceJet's market share stood at 4.4% at the end of June, the latest data from the aviation regulator showed, compared to 9.5% last year. The airline is struggling to raise funds and restore operations of its grounded fleet amidst the stringent competition in the sector.
The airline operated 376 charter flights. It also successfully hived off its cargo logistics arm effective April 1, 2023, the filing said. “Consequent to the hive-off there is an improvement of net worth in SpiceJet to the tune of INR 2,557 Crore (from negative Rs 4,288 Crore to negative Rs 3,232 Crore i.e. positive variance by 25%),” the company added.
Following the development, SpiceJet Ltd’s shares surged 6.72% to close at Rs 33.67 a piece on BSE. During the day, it rallied 11.56% to Rs 35.20.