Budget airline SpiceJet has announced a standalone net profit of Rs 23.28 crore in the quarter ended in December 2021, compared to the Rs 56.96 crore loss reported in the same quarter last year. The total revenue for the Q3 FY 2022 stood at Rs 2,259.30 crore, a 33.95% rise compared to Rs 1,686.62 crore in the same quarter the previous year.
SpiceJet is battling numerous legal complications, including an insolvency proceeding, the impact of which is seen in its stock price. Following the quarter result announcement, the SpiceJet share price showed a slight increase of 7%.
Considering the EBITDA, SpiceJet Q3 FY22 reported a profit of Rs 511 crore against a loss of Rs 106 crore for the previous quarter.
SpiceJet Chairman and Managing Director Ajay Singh attributed the success reflected in the quarter to the airline’s logistics operations, the revival of passenger traffic and other assistance from aircraft manufacturers and lessors. The airline also witnessed an increase in fleet size and added new destinations in the quarter.
Singh added that the airline had to face an unexpected delay in the return to service of the Boeing 737 Max aircraft, an increase in aviation turbine fuel cost, and certain exceptional adjustments. These factors affected airlines’ financial performance, according to Singh. However, he said that he is witnessing overall signs of recovery in passenger segments and logistics segments, which will benefit the airline in the next quarter.
Rapidly Increasing Fuel Costs Can Make the Road Ahead Bumpier for SpiceJet
Regarding its insolvency proceedings, Supreme Court has stayed the Madras High Court’s order to wind up SpiceJet’s operations by three weeks. The company has initiated a talk with Credit Suisse AG and expects to resolve the matter in the said period.
SpiceJet claimed that in terms of operational parameters, it announced the best passenger load factor among all airlines in India during the quarter ended in December. The average domestic load factor for Q3 FY22 was 85.2%.
Overall, SpiceJet looks like a strong survivor in turbulent times. However, the ride ahead continues to look bumpier for the airline, considering challenges like fuel costs. Fuel cost accounts for 42.7% of the net operating revenue of the airline in Q3 FY2022, impacting the operational profitability of the airline.
