SpiceJet losses widen, CFO resigns

Low-cost carrier SpiceJet widened losses to ₹458 crore for the quarter ending March 31, 2022. Losses in the year-ago period was ₹235 crore.

 For the June quarter (Q1FY23), losses were ₹789 crore as against the ₹729 crore it reported in the year-ago period. SpiceJet reported results for two quarters, Q4FY22 and Q1FY23, on Wednesday. The January-March period results were delayed following a ransomware attack on its systems. 

In FY22, the airline’s losses were ₹1,725 crore versus ₹998 crore in FY21. 

During the two quarters under review, the revenue from operations stood at ₹1,865 crore (Jan-Mar 2022) and ₹2,457 crore (April – June 2022), respectively. Revenues for the April-June quarter more than doubled, y-o-y, up from ₹1,090 crore in Q1FY22. 

The auditors, Walker Chandiok & Co LLP, while reviewing the Q1FY23 accounts, said the Group’s accumulated losses amount to ₹6,747 crore in “which have resulted in complete erosion of its net worth”. The current liabilities have exceeded its current assets by ₹6772 crore, as of June 30, 2022. They have expressed concern over the airline’s ability to continue as a going concern. 

“However, the management is of the view that the going concern basis of accounting is appropriate,” it said in a qualifying opinion. 

According to Ajay Singh, Chairman and Managing Director, SpiceJet, the industry has witnessed one of the most severe operating environments in the recent past, which impacted the progress and recovery made in Q3FY2022.

Record high ATF prices and the depreciating rupee were the major contributors. 

“Despite the complex operating environment and highest ever input costs, SpiceJet has been able to sustain its operations with the confidence shown by our partners and passengers. Last year was a period of restructuring and settlements and we successfully completed and implemented settlements with most of our major partners including manufacturers and lessors setting the stage for the carrier’s steady growth and expansion.. As we move ahead we are encouraged with the strong travel demand and our focus for the next year would be to induct more fuel efficient Boeing 737-8 MAX aircraft and concentrate on our regional and international routes,” he said as per the company statement.

Singh added that the Board has mandated fresh capital issuance and the Company will be shortly engaging with investment bankers for a potential raise of up to $200 million.

In a regulatory filing, the airline mentioned that its CFO, Sanjeev Taneja resigned with effect from August 31. A new appointment – a candidate who has already been identified by the Board – will take charge in September, it said.

Published on

August 31, 2022

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