Thriving on challenges - this is one thing that we at SpiceJet have always done sinceinception. The harder the situation gets the greater is our motivation to think creativelyand overcome it. It has enabled us to build a robust foundation and a business model thatis resilient.
FY 2019-20 has been another such year where we once again demonstrated our ability toovercome the challenge. The year started with the worldwide grounding of Boeing 737 Maxfollowing two unfortunate incidents due to technical reasons. These fuel- efficientaircraft were a core part of our growth and cost reduction strategy and the overnightgrounding of 13 of our Boeing 737 Max fleet threw open a major challenge of flightcancellations and hassles for passengers. However SpiceJet acted fast and re-accommodatedpassengers to ensure they were in no way affected by it. The incident also forced SpiceJetto use age-old aircraft having higher operational costs and at the same time bear thefixed costs associated with the Max fleet resulting in significant impact onprofitability.
As the year progressed the aviation industry was further hit by hike in aviationturbine fuel (ATF) prices and rupee depreciation. The year finally ended with anunprecedented crisis due to the global outbreak of Covid-19 pandemic which brought theworld to its knees shutting down economic activity and forcing people to stay at home.Nations including India closed their borders and restricted air travel hitting tourismand businesses worldwide.
While the passenger travel started declining since the beginning of 2020 the thirdweek of March saw complete halt of domestic and international flights due to nationwidelockdown to contain the virus spread. The move while necessary affected SpiceJet andother airlines.
With the pandemic taking a tragic toll on lives and livelihoods never in recent memoryhas there been a greater need for empathy and compassion than now. SpiceJet was among thefirst across industry to show that it cared as much for the nation and its people as forsustainable returns to shareholders. We contributed to the government's fight by assistingin transporting essential goods medicines and medical equipment and other cargo bothwithin our borders and outside. We cared for the security of our employees by ensuring nojob losses. Unfortunately we had to implement pay cuts barring for employees in thelowest pay grades to keep the airline standing on its wheels. I thank our employeespassengers and all stakeholders for being with us in these difficult times.
Displaying resilient performance
In spite of all the challenges SpiceJet displayed resilience through FY 2019-20delivering an exceptional performance on several fronts. Our capacity (average seatkilometres) grew 40% to 31334 million and passenger volumes remained strong as itcontinued to rule the skies with an enviable 90%+ load factor which we have done for arecord 59 successive months.
An important milestone in FY 2019-20 was the induction of our 100th aircraft - a Boeing737 - to the fleet. The credit for this goes to all SpiceJetters who worked tirelesslytowards achieving this goal. Since April 12019 we have added 39 aircraft including737s Q400s and freighters taking our total fleet to 114 as on March 31 2020.
Post March 2020 we calibrated our capacity keeping in view the effects of pandemic andreturned many aircraft.
We consolidated operations at Mumbai Airport shifting from Domestic Terminal (T1) tothe world-class Terminal 2 (T2) at Chhatrapati Shivaji Maharaj International Airport.Similarly at Delhi Airport we streamlined operations by shifting to Terminal 3 fromTerminal 2. These developments will enable us to deliver a hassle-free travel experienceto customers. We were also allotted additional departure slots at key airports includingMumbai and Delhi.
While our performance on operational front has been remarkable our financialperformance could have been better. Our Pax revenue grew 33% to ' 114448 million in FY2019-20. However inflated costs following the grounding of Max fleet and decline inpassenger travel and finally the suspension of flights due to Covid-19 led to a net lossof ' 9348 million. This included a non-cash loss of ' 6970 million due to forex loss onrestatement of lease liability under Ind-AS 116.
Creating opportunities with relationships
SpiceJet continued to forge partnerships with global peers to enhance brand reach. Ourpact with Emirates offers wider connectivity to our customers on their network across theUS Europe Africa and the Middle East. During the year we also signed MoUs with Gulf Airand Ras Al Khaimah International Airport. The former would enable exploring interliningand code sharing prospects. The latter would enable us to develop and promote tourism inRas Al Khaimah U.A.E. while working towards developing it into an aviation hub with aimto extend its connectivity to the Gulf and European destinations.
Building for the future
An airline's strength lies in its robust network. Strong and expanding domestic andinternational network has always been our USP.
This was reflected as we launched non-stop international flights to global hotspotssuch as Hong Kong Dubai and Riyadh. Domestic network was strengthened with the additionof new cities and flights to enable more Indians fly and connect the unconnected parts. Weadded close to 200 new domestic and international flights to our network including 30routes under UDAN. SpiceJet now flies to 47 domestic and 10 international destinations.
Within a few weeks into the crisis we stepped up efforts to supply essentialcommodities and successfully built India's No. 1 Cargo Company. We operated thousands offlights to transport over 76500 tonnes of cargo including medicines and medicalequipment fruits vegetables and other essentials to all corners of India and the world.We helped our country and fellow citizens when they needed it the most. Our cargo networknow spans 63 domestic and 44 international destinations.
We undertook several cost control measures and adopted robust accounts and payablemanagement strategy to ensure our balance sheet remains strong.
We are also strengthering our technology infrastructure as we see ourselvestransforming into a fully technology-driven airline.
Pioneering branding and sustainability efforts
Apart from making aviation affordable SpiceJet is also strongly focussed on making itenvironmentally sustainable. In a first-of- its-kind initiative we launched electrictarmac coaches at Chennai Airport - a new sustainability benchmark in Indian aviation thatwill considerably reduce carbon footprint.
We also undertook several unique branding initiatives. We launched SpiceDemocracywhereby free flight tickets were offered to voters who wished to cast their votes in theDelhi Assembly elections.
Over 7000 citizens participated in the campaign and helped build a stronger and morevibrant democracy. We converted an aircraft into a flying billboard with movie postergiving a unique and unmatched visibility to the music launch of the Tamil filmSoorarai Pottru' inside an aircraft at Chennai International Airport. We teamed upwith the Sports Authority of India and ran special flights to provide an exclusive flyingexperience to over 1000 athletes at the third edition of the 2020 Khelo India Youth Gamesheld in Guwahati.
The global aviation industry is presently flying through rough weather and SpiceJet isno exception. In spite of the current situation SpiceJet is on course to becoming aworld-class Indian airline in the true spirit of a strong Aatma Nirbhar (self-dependent)India. Our immense flexibility to upsize and downsize capacity as per the demand outlookand adjust to any situations makes us a sustainable airline in the challenging Indianaviation space.
The pandemic has given us an opportunity to be of service to our country by leveragingour cargo operations for supplying essentials. Having experienced success in cargooperations we are extremely confident on this business and intend to expand itconsiderably over the next two years.
I would like to thank you all for your continued trust and steadfast support that hasenabled SpiceJet to fly the Indian skies and beyond for 15 years. I have no doubt that wewill together continue to set new benchmarks and break new barriers in the coming years.
I look forward to many exciting journeys with you.
Stay safe. Stay well.
Chairman and Managing Director