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SpiceJet Q1 results: Net profit drops 20% to Rs 158 cr due to fewer flights

Airline said it has initiated process of raising Rs 3,000 crore through QIP

Spicejet (Photo: Wikipedia)

2 min read Last Updated : Aug 14 2024 | 10:53 PM IST

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Indian low-cost airline SpiceJet, headquartered in Gurugram, reported a 20 per cent year-on-year (Y-o-Y) decline in consolidated net profit, falling to Rs 158.1 crore in the first quarter (Q1) of 2024-25 (FY25). The decrease is attributed to a reduction in flight operations due to financial challenges.

Flight services decreased by 30.3 per cent Y-o-Y to 882 flights per week in August, according to aviation analytics firm Cirium.

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SpiceJet is in the process of raising Rs 3,000 crore through a qualified institutional placement (QIP), which is expected to be completed by the end of next month.

Ajay Singh, chairman and managing director of SpiceJet, said, “The upcoming Rs 3,000 crore fundraise through QIP will be instrumental in strengthening our financial foundation and positioning SpiceJet for sustained success. We believe in the resilience of our business model and remain committed to providing our customers with the best flying experience possible.”

SpiceJet’s total income decreased by 8.3 per cent Y-o-Y to Rs 2,077.7 crore in Q1FY25.

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Earlier this year, the airline’s shareholders approved the issuance of equity and warrants to raise Rs 2,241 crore, of which Rs 1,060 crore has already been raised.

Last month, SpiceJet reported a consolidated net loss of Rs 418.3 crore for 2023-24, marking the sixth consecutive year of losses.

The budget carrier last reported a profit in 2017-18, when it posted a consolidated net profit of Rs 557.4 crore.

The airline said, “Losses over the past few years have been primarily driven by adjustments related to the implementation of Ind AS 116 (a new accounting standard that came into force in 2019), adverse foreign exchange rates, operational disruptions during Covid-19, and sub-optimal operations due to liquidity constraints faced by the group.”

For several quarters, SpiceJet has struggled with a cash crunch amid ongoing legal battles over unpaid dues to aircraft lessors, engine lessors, lenders, and former promoter Kalanithi Maran.