SpiceJet Q2 loss widens to Rs 463 crore on higher costs; revenue jumps 52%

SpiceJet, the country's second largest airline, on Wednesday reported widening of net loss to Rs 462.6 crore for the second quarter ended September 30, 2019, on account of higher costs with respect to grounding of Boeing 737 MAX planes and changes in accounting norms. The low cost carrier had posted its highest-ever net profit at Rs 261.7 crore in the June quarter of this fiscal.

"The Gurgaon-headquartered airline had reported net loss of Rs 389.4 crore in the September quarter of FY19 (Q2FY19)," SpiceJet said in a filing to the Bombay Stock Exchange.

Revenue from operations, however, surged 51.76 per cent to Rs 2,845.3 crore in Q2FY20 from Rs 1,874.8 crore in Q2FY19, as it added more destinations and expanded its fleet of passenger and freighter aircraft.

The company said in the exchange filing that the loss during the September quarter was mainly on account of inflated costs with respect to MAX grounding and a seasonally weak quarter. The figure includes a "loss of Rs 180.3 crore on account of accounting standard Ind AS 116", which come into force from April 1, 2019.

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"With the grounding of Boeing 737 MAX, the company continues to incur various costs and losses with respect to these aircraft. The company is in the process of determining the costs and losses (including opportunity losses) incurred by it and has initiated the process of seeking reimbursements and claims from the Aircraft manufacturer," the company said in the filing.

During the quarter under review, total expenditure increased to Rs 3,537.48 crore from Rs 2,286.65 crore in the corresponding period last year, led by rise in aircraft fuel and airport charges. Aircraft fuel charges rose 37.51 per cent year-on-year (YoY) to Rs 1,162.09 crore, while airport lease rental increased by 63 per cent YoY to Rs 292.44 crore. Aircraft maintenance cost increased by 43.92 per cent YoY to Rs 292.44 crore in the September quarter.

Ajay Singh, Chairman and Managing Director, SpiceJet said, "With the industry's growth rate slowing down in the past few months the impact is evident on the bottom line. We, however, remain optimistic that the sector will regain the lost momentum as the inherent demand remains very strong."

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On fleet expansion outlook, the airline said it has inducted three Boeing 737 NG aircraft, one Q400 and two Freighters during the quarter and plans to enhance passenger capacity by inducting aircraft on short term leases in the ongoing winter schedule. The company said the service of the 737 MAX is likely to resume in January 2020, as indicated by Boeing, which "will be a big boost that will add new fuel and operationally efficient aircraft in Q4 FY20.

At the end of September quarter, SpiceJet's fleet size stood at 113 with 630 average daily flights.

Ahead of Q2 earnings, shares of SpiceJet closed 1 per cent lower at Rs 113.70 apiece on the BSE.

Edited by Chitranjan Kumar