SpiceJet reported a larger loss during the second quarter, as higher operating expenses took a toll on the Indian low-cost carrier. Operating loss for the quarter ended 30 September 2021 came in at Rs 5.62 billion, nearly five times the Rs 1.13 billion loss for the same quarter in 2020.
Total revenue came in at Rs 15.39 billion, up 19 percent year-on-year. Operating expenses were up 49.3 percent to Rs 21 billion, with higher fuel and leasing costs being the primary factors for the increased expenditure.
Net loss for the July-September 2021 period came in just shy of Rs 5.62 billion, up from the Rs 1.13 billion loss in the previous year.
Cash and cash equivalents as of 30 September 2021 came in at just above Rs 411 million, up from the Rs 307 million it had on the same date in 2020.
First-half losses continues to hit SpiceJet
Meanwhile, SpiceJet’s operating loss for the first six months of its fiscal period grew 82.2 percent year-on-year to Rs 12.9 billion, as compared to the Rs 7.06 billion loss for the same period last year.
Total revenue was up 40.4 percent to Rs 28 billion, while operating expenses rose 51.5 percent to nearly Rs 41 billion. Net loss came in at nearly Rs13 billion.
SpiceJet, in a press release attached to its results statement, acknowledged that its operations “continued to be significantly impacted,” due to a second wave of COVID-19 infections, which has dampened demand for the second quarter.
Cargo subsidiary SpiceXpress was a bright spot for SpiceJet with revenue growth. However, the subsidiary saw a negative cash flow for the quarter as it could not pass the higher fuel costs to customers who were in long-term contracts. As a result, it has renegotiated the contracts “to suit the present operating cost environment”.
“We have made excellent progress in our recovery and I expect this trend to continue forward in the coming quarters. With the nationwide vaccination drive growing at an unprecedented pace across geographies, there is a significant jump in travel demand and we are very excited about the demand recovery. The settlement with key lessors, the return of the 737 MAX in the current quarter (Q3), transfer of the logistics business and some very significant announcements lined up soon are all positive tailwinds that should have a significant impact on our long term plans,” says SpiceJet’s chairman and managing director Ajay Singh.
“The return of the 737 MAX comes at the perfect time for us with passenger traffic picking-up and the government allowing airlines to operate at full capacity. We look forward to inducting additional capacity in the form of our 737 MAX aircraft that will upswing our operational efficiencies and provide significant cost saving capabilities,” adds Singh.