SpiceJet Announces Record Quarterly Profit Post-COVID

August 14, 2023

INDIA, 14 AUG | Indian budget airline SpiceJet announced its strongest quarterly profit post-COVID in 4 years, with reduced expenses compensating for a decline in revenue, causing its stock to rise by 6%. In the first quarter ending on June 30, the company recorded a profit of 24.7 million USD, a notable improvement from the 7.89 billion USD loss reported the previous year.

The airline also disclosed a profit of $2.03 million for the quarter ending on March 31, in contrast to a loss of $58.2 million the prior year. This report marks SpiceJet's return to quarterly reporting after a delay caused by the illness of a key audit committee member.

Amid challenges, including battles with lessors over payments and heightened competition in the aviation sector, SpiceJet is striving to raise funds and restore operations for around 25% of its grounded fleet. A significant move to aid the airline came from its main shareholder, Ajay Singh, who pledged an infusion of $60.3 million to support the carrier's recovery efforts.

Carlyle Aviation Partners, an aircraft lessor, secured a 7.5% stake in SpiceJet's cargo unit, SpiceXpress, in February. Meanwhile, other airlines like IndiGo and Akasa Air capitalized on SpiceJet's difficulties, impacting its market share, which fell to 4.4% in June, down from 9.5% the previous year.

The airline's first-quarter revenue dropped by 22% to $221.9 million, while expenses decreased by 37%, partly due to a nearly 50% reduction in fuel costs and a significant 99% decrease in foreign exchange losses resulting from fewer flights. The load factor, representing the portion of passenger carrying capacity used, increased to 90% by the end of June, a rise from 86.4% the previous year.

What are your thoughts? Comment below!

© 2023 Planeopedia LLP
Written by: Sohail Sawlani
All Rights Reserved
UEN: T23LL0860H

Sources

- Reuters
- Wikimedia Commons