Stung by lockdown, SpiceJet posts net loss of ?807 crore in Q4

spicejet

New Delhi: Budget carrier SpiceJet on Wednesday reported a net loss of ?807.1 crore for the fourth quarter ended March 2020, owing to the coronavirus-induced lockdown that led to travel restrictions.

It had posted a net profit of ?56.3 crore in the corresponding quarter of the previous financial year, the airline said in a statement. For the full financial year 2019-20, its net loss stood at ?934.8 crore as against a net loss of ?316.1 crore in 2018-19.

The airline in the statement also informed that its Chief Financial Officer Kiran Koteshwar has resigned and “decided to pursue an exciting opportunity overseas”. He will remain with SpiceJet till August 31 and for a transition thereafter, it said.

However, its total income in January-March 2020 rose to ?3,057.3 crore, compared with ?2,571.8 crore in the year-ago period. For the full financial year 2019-20, the airline’s total income also jumped to ?13,206 crore, against ?9,258 crore in 2018-19.

The company’s total expenses during the quarter under review also increased to ?3,864.4 crore, against ?2,515.5 crore a year ago. In complete 2019-20, it stood at ?14,141 crore as compared with ?9,510 crore in the previous financial year.

SpiceJet Chairman and Managing Director Ajay Singh said, “Two key factors that adversely impacted our performance and bottomline (profit) were: The COVID-19 pandemic, which started affecting demand adversely from mid-February, and grounding of the 737 MAX, which has been out of service for over a year now.”

He added that despite the year-long grounding of the 737 MAX aircraft, SpiceJet ran a profitable operation till the COVID-19 pandemic hit demand from mid-February.

The aviation industry, both in India and globally, is going through the toughest-ever phase in its history, he said.

In a BSE filing, the airline’s independent auditor S R Batliboi and Associates LLP said the airline’s financial statement indicates that the “(SpiceJet) group has accumulated losses and its net worth has been fully eroded”.

It also added that the group has incurred a net loss during the current and previous year and, the group’s current liabilities exceeded its current assets as at the balance sheet date.

“These conditions, along with other matters… indicate the existence of a material uncertainty that may cast significant doubt about the group’s ability to continue as a going concern,” the auditor said.

Scheduled international passenger flights continue to remain suspended in India since March 23. However, India has signed bilateral ‘air bubble’ agreements with countries like the US, Germany and France that allow airlines of both the countries to operate special international charter flights.

The aviation industry has been significantly impacted due to the travel restrictions imposed in India and abroad in view of the coronavirus pandemic. Airlines in India have taken cost-cutting measures such as pay cuts, leave-without-pay and firings of employees.

India resumed domestic passenger flights from May 25 after a gap of two months. The airlines have been allowed to operate only a maximum of 45 per cent of their pre-COVID-19 domestic flights.

However, the occupancy rate in Indian domestic flights has been around just 50-60 per cent since May 25.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

News Source: livemint

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