SpiceJet on Wednesday reported a loss of Rs 462 crore for the September quarter, its first quarterly loss during the current
financial year. This was on the back of higher costs during a seasonally weak quarter.
The numbers could havebeen worse, if the Rs 171-crore compensation from aircraft manufacturer Boeing wasn’t accounted for — a component that was contested by the airline’s auditor. SpiceJet has claimed compensation from Boeing for the grounding of the 737 Max. However, the process hasn’t been started by Boeing yet. The airline had claimed compensation of Rs 114 crore in the previous quarter, and is yet to receive the amount.
Boeing has announced a $4.9-billion compensation for the grounding. “What we are claiming is only partial compensation. In reality, the compensation amount would have been higher as I have suffered losses by being forced to fly old aircraft, paying airport charges, and crew salary for aircraft not being flown. The compensation amount is legitimate,” said SpiceJet Chief Financial Officer Kiran Koteshwar.
Despite improving yield,the numbers slipped into the red, hit by high maintenancecosts and lease rental. This was an outcome of the airline taking over old Jet Airways aircraft, in the absence of the 737 Max.
“Due to the absence of the Max, there was huge asymmetry in operations, with us operating twin class 167-seater aircraft, while we prefer the single class 189-seater.
That adds to our costs. Aircraft maintenance costs also crept higher. We expect the Max to return early next year,” Koteshwar added.
SpiceJet has also been forced to wet-lease five old aircraft from the market on account of non-delivery of the Max. “As of now, we have five aircraft that are wetleased, and operating. We don’t have any robust capacity addition plan, but we may
have to lease more aircraft if the Max is delayed,” he said.
SpiceJet’s maintenance cost grew 45 per cent year-onyear in the September quarter.
Total expenses rose 54.7 per cent to Rs 3,537.49 crore, even though fuel costs fell 77per cent to Rs 63.25 crore. Besides, the airline warned on Wednesday that the threshold for a fare hike had decreased substantially, on account of the ongoing economic
slump — the second to do so after IndiGo. “There is some palpable impact of the economic slowdown, if Diwali fares are anything to go by,” said Koteshwar.