Delhi-based low-cost airline SpiceJet reported a profit after tax of Rs 1.5 billion for the quarter ended June 2024, reflecting a 26% increase over the 4Q24. The airline said in a statement without getting into details that this marks a significant milestone in the airline’s recovery efforts following a challenging period for the aviation sector. This follows a previous improvement.
The airline claims that it has initiated the process of raising Rs 30 billion through a Qualified Institutional Placement (QIP), which is expected to be completed by the end of September 2024. The airline statement said the funds will further strengthen its financial position and support its growth plans. Raising the funds was cleared by the airline’s board at its meeting here today, which also cleared the financial results.
“This fresh infusion of funds will be pivotal in enabling the airline to expand and unground its fleet, enhance operational capabilities, settle liabilities, and improve its overall market competitiveness. These funds will stabilise the overall operations and allow expansion,” the airline’s statement adds.
Interestingly, a leading economic Indian daily, Economic Times, reports that the airline’s promoter, Ajay Singh, might dilute his stake in SpiceJet by over 10 percent to help raise Rs 30 billion. The airline’s statement, however, did not say whether Singh is to dilute his stake to raise funds for the airline.
Talking about the latest financial figures, SpiceJet said it reported an operating profit of Rs 3.93 billion, underpinned by an EBITDA and Amortization of Rs 4.01 billion, which is an improvement from Rs 3.1 billion in quarter four of the fiscal year 2024. The statement reported an EBITDAR or earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs of Rs 6.50 billion, up from Rs 6.16 billion over 4Q24.
While stating that he was pleased with the airline’s reported profits, Ajay Singh, Chairman and Managing Director of the airline, said, “The upcoming Rs 30 billion fundraising through QIP will be instrumental in reinforcing our financial foundation and positioning SpiceJet for sustained success.”
IndiGo and SpiceJet are the only two listed Indian commercial airlines in a market with other players, including Air India (a combination of four airlines that will eventually be consolidated into two airlines, one of which will be low-cost and another full service) and Akasa. Gofirst, another airline in India, ceased operations in May last year.
