SpiceJet Posts Q1 Profit Of $24.5 Million

India’s low-cost carrier SpiceJet has announced the results of the last two quarters. While it posted a loss in the quarter ending in March, the airline turned profitable in the first quarter of 2024 due to a strong rise in travel demand. It’s worth noting that the financial year in India begins on April 1st of every year and lasts until March 31st of the following year.

Profitable quarter

Budget airline SpiceJet is celebrating the first quarter of FY 2023-24 with a profit of around ₹2 billion ($24.5 million). For the same quarter last year, it posted a net loss of ₹7.8 billion ($94 million). The airline’s standalone revenue for the quarter ending in June, however, declined by 18.5% to ₹20 billion ($240 million) compared to ₹24.5 billion ($295 million) in the same quarter last year.

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One of the parameters that SpiceJet routinely performs well in is the load factor, and the last quarters have been no exception. It said that its domestic load factor in Q1 was the highest in the industry at more than 90%, while Passenger RASK (Revenue per Available Seat-Kilometer) increased by 26% due to an increase in yield by 22%. Ajay Singh, Chairman and Managing Director of SpiceJet, commented,

“I firmly believe in the potential of our airline, and I am pleased to have contributed to its growth by infusing INR 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.”

Cash injection

The airline received a cash infusion of more than $60 million in July from Singh by way of subscribing fresh equity shares and/or convertible instruments. With the fund infusion, SpiceJet was also entitled to additional credit facilities of around $24 million under the Indian government’s Emergency Credit Line Guarantee Scheme.

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With Singh’s infusion of funds, SpiceJet’s financial position was substantially strengthened. After deliberating on his proposal, the airline’s board members agreed to issue equity shares, equity share warrants, and convertible securities on a preferential basis in one or more tranches for the offered amount.

As SpiceJet’s finances show signs of improvement, it also expects to grow its fleet and domestic reach, both of which have dwindled in the last several months. The carrier is now behind Akasa Air in terms of market share and is looking to increase its fleet size to recover lost ground.

Settlements

SpiceJet has also settled some of its liabilities in recent months. In June, it cleared a loan of ₹1 billion ($12.2 million) to the City Union Bank. The airline took the loan in 2012 and paid its last tranche of ₹250 million ($3 million) on June 30th and, with that, managed to release all securities that were pledged with the bank.

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The same month, it also reached a settlement with one of its lessors for its Q400 aircraft, Nordic Aviation Capital (NAC), which has leased several Q400 propellor aircraft to the carrier. The airline stated that it entered an agreement with NAC, settling all past liabilities.

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