NEW DELHI : No-frill carrier SpiceJet Ltd on Tuesday reported a consolidated net profit of ₹42.45 crore in the three months ended 31 December from a loss of ₹66.78 crore in the year ago period, primarily due to the compensation it claimed for the grounding of Boeing 737Max planes.
Interestingly, the airline was operationally loss-making in the recently concluded December quarter with its total expenses at ₹2,557.432 crore far exceeding its total revenue from operations at ₹2,262.65 crore.
The airline claimed other income of ₹414.69 crores, which was primarily attributed as compensation for the grounding of Boeing 737Max planes.
In comparison, the country's largest domestic carrier IndiGo reported a consolidated net profit that rose to ₹129.80 crores in the three months ended 31 December from a loss of ₹620.14 crores in the year-earlier driven by a rise in yields and passenger traffic.
During the quarter ended on 31 December, SpiceJet reported consolidated net revenue of ₹2,677.34 crores, up from ₹1,870.60 crores during the same period of the previous year, up 43.13% annually.
However, the airline's (consolidated) total expenses rose sharply by 32% during this period.
"The passenger industry witnessed the much-needed turnaround in the third quarter as Covid cases ebbed in the first half of the quarter, travel picked up significantly and there was finally hope that the worst was behind us," the airline's chairman and managing director Ajay Singh said in the results statement.
"However, that changed by the second half of December as Omicron halted that recovery," Singh added.
Meanwhile, the auditors of the airline, Walker Chandiok &.Co LLP said that the airline had recognised ₹1,554.90 crores as expenses occurred for grounding of 737Max planes up to the quarter ended on 30 September 2021, while these claims have been settled during the quarter ending on 31 December 2021.
"The settlement with Boeing was a significant event during the quarter. As expected, the Company received cash and non‐cash accommodations in excess of the amounts due to lessors during the period of grounding of MAX aircraft," SpiceJet said in the statement.
Boeing 737 Max planes were grounded in India in March 2019 after two fatal crashes and were allowed to return to service in August 2021 after Boeing Co. carried out safety modifications.
SpiceJet has been claiming compensation from Boeing as other income in its financial statements every quarter since the grounding, though the settlement was done only during the quarter ended 31 December 2021.
Meanwhile, the airline's auditors have again cast doubt about its ability to continue as a 'going concern'.
"...as of that date, the Group's accumulated losses amounts to ₹54,778.72 million ( ₹5,477.87 crore) which have resulted in complete erosion of its net worth and the current liabilities have exceeded its current assets by ₹63,470. 89 million ( ₹6,347.10 crore) as at 31 December 2021," the auditors said.
Going ahead, SpiceJet faces a difficult January-March 2022 quarter, which has been highlighted by a steep rise in fuel prices and a sharp drop in passenger traffic during January due to the spread of the Omicron variant of coronavirus.
SpiceJet and its promoter Ajay Singh also face a dispute with former promoter Kalanithi Maran over the transfer of shares of the airline. Maran recently refused a ₹600 crore settlement, arguing that dues were higher at ₹900 crore.
The Supreme Court is set to hear the case again next month.
On Tuesday, SpiceJet's stock at the BSE ended the day at ₹64 per share, up 8.02% from the previous day while the benchmark Sensex was up 3.08% at 58,142.05.
