SpiceJet posts loss in Q2 on account of inflated costs with respect to MAX grounding and seasonally weak quarter

SpiceJet has posted a loss of Rs 462.6 crore in Q2 as against Rs 389.4 crore for the same quarter last year. This includes a loss of Rs 180.3 crore on account of accounting standard IND-AS116; without which the loss is Rs 282.3 crore, a statement from the air carrier said on Wednesday.

The statement said, "The company recorded a 52 per cent rise in second-quarter operational revenue to Rs 2,845.3 crore as it added more destinations and expanded its fleet of passenger and freighter aircraft."

"Operating revenue was Rs 2,845.3 Crore for the reported quarter as against Rs 1,874.8 crore in the same quarter last year. For the same comparative period, total expenses were Rs 3,536.1 crore as against Rs 2,291.5 Crore; EBITDA before exceptional items were Rs 90.8 crore as against Rs 310.4 crore (loss); EBITDAR before exceptional items were Rs 154.1 crore as against Rs 34.9 crore (loss)," the press note said.

The press note further said, "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."

"SpiceJet yet again excelled on operational parameters to report the highest passenger load factor amongst all airlines in the country all through the quarter. The average domestic load factor for the quarter was 92.6%. SpiceJet has recorded over 90 per cent load factor for 53 successive months," the press note said.

According to the press note, "Ajay Singh, Chairman and Managing Director, SpiceJet said that 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."

"The continued grounding of the 737MAX has hit our growth plans adversely and resulted in inefficient operations and as a result, increase in costs. Nevertheless, we have added 37 planes to our fleet in the past six months to ensure smooth operations and continued growth. The likely return to service of the 737 MAX early next year, and as indicated by Boeing recently, would mean that SpiceJet has at its disposal more than 25 brand new planes and we look forward to it," Singh said.

"The return of the 737 MAX will provide a huge boost to our operations and we are confident that with the rigorous scrutiny, the MAX will be one of the safest airplanes ever to fly," he added.