Impact of COVID-19 on SpiceJet Q1 Results – posts loss due to flight suspension
Cargo revenue more than doubles
Company launches aggressive cost reduction plan
For the Quarter ending June 2020
· EBIDTAR profit of INR 13.5 Cr
· Revenue from cargo increased by 144%
· Operating loss of INR 568.3 crore, net loss of INR 593.4 crore compared to a net profit of INR 261.7 crore in the same period last year
· Registers industry’s highest domestic load factor of 66.4%
· Capacity (in terms of seat kilometre) contracted by 90%
· Revenue from operations fall by 83% due to COVID-19
· Non-cash Ind-AS 116 impact of INR 25.1 crore
· Continues to maintain market share of above 16% despite Covid-19 impact
· Re-structuring of aircraft leases and early return of aircraft thereby having long term saving impact on costs
· Emerged as India’s No. 1 Air Cargo airline
· Likely return to service of the MAX in fourth quarter of FY2021 to boost operations
· Received approval from DGCA to conduct drone trials, launches all-new frequent flyer program, complimentary in-flight entertainment system
· Actively using Ras Al-Khaimah airport as a hub for cargo & passenger operations
· Operating 47% of pre-covid schedule post restart of operations
· Operating a fleet of 13 cargo aircraft including two wide-body planes. Launches long-haul wide-body cargo operations
· Largest air cargo airline, with carriage of 50,000 tonnes of cargo on more than 7000 flights
· Cargo network spans over 63 domestic and 44 international destinations
· Designated as an Indian scheduled carrier to operate to US and UK. Secured slots at London Heathrow airport
· Operated successful long-haul repatriation charter flights to London, Rome, Amsterdam & Toronto since August 1, 2020
· Operated more than 800 charter flights to repatriate over 1,20,000 Indian nationals stranded abroad
SpiceJet, India’s favourite airline and the largest air cargo operator, reported a net loss of INR 593.4 crore in the first quarter of FY21 against a profit of INR 261.7 crore in the same quarter of the previous year as flight operations remained suspended for most part of the quarter following the nationwide lockdown.
Operating revenue was INR 514.7 crore for the reported quarter as against INR 3,002.1 crore in the same quarter last year. For the same comparative period, operating expenses were INR 1303.2 crore as against INR 2,887.2 crore. On an EBITDA basis, loss was INR 11 crore for the reported quarter as against profit of INR 747.5 crore for the corresponding quarter last year. On an EBITDAR basis, the profit was INR 13.5 crore for the reported quarter as against profit of INR 812.1 crore for the same quarter last year. The present operating environment on account of Covid-19 though does not reflect the true comparison of the current results with those of corresponding quarter last year.
Ajay Singh, Chairman and Managing Director, SpiceJet, said, “This is the worst-ever crisis to hit the aviation sector but I am pleased that SpiceJet continues to innovate and outperform the industry. Flight operations were suspended for most part of the quarter and the partial resumption of flights initially and the weak demand thereafter was a reminder of the significant problems that this pandemic has resulted in.”
“As expected, Team SpiceJet showed remarkable resilience to deal with a crisis situation, once again. Our performance during the last six months clearly signifies our positive attitude and our ability to find opportunity in adversity. This has seen us quickly bounce back with industry best load factors and emerge as India’s number one cargo company. I am confident that as more and more States ease travel restrictions and business activity gets back to normal there will be a significant improvement in the operating environment for airlines and we are witnessing some early encouraging signs towards recovery. I expect our cargo business to continue to expand in the coming quarters. I am also encouraged by the progress made in the re-entry of Boeing’s Max aircraft into service.”
In terms of operational parameters, SpiceJet had the best passenger load factor amongst all airlines in the country during the quarter. The average domestic load factor for the quarter was 66.4% and the airline maintained its market share of above 16% despite the impact of Covid-19 thus demonstrating robust operating parameters.
Key business updates
SpiceJet played a key role in keeping the country’s supply chain intact during the lockdown period besides playing a key in helping our fellow citizens in every possible manner.
Till date, SpiceJet has operated over 800 charter and Vande Bharat flights to help repatriate more than 1,20,000 stranded Indian citizens from countries such as Philippines, Kyrgyzstan, Russia, Netherlands, UAE, Saudi Arabia, Oman, Qatar, Lebanon, Bangladesh, Maldives and Sri Lanka. SpiceJet also operated long haul wide body charter operations with a fleet of A330/A340 aircraft.
SpiceJet established itself as country’s largest cargo operator and operated more than 7000 flights and transported around 50,000 tonnes of cargo since March 25, 2020. Out of these 7000 flights, 40% were to international destinations. In addition to handling its regular cargo business, it also transported surgical supplies, sanitizers, face masks, coronavirus rapid test kits, IR thermometers etc. and providing doorstep deliveries of essential supplies, medicines and medical equipment to various cities in India at a time when most people wouldn’t venture out of their homes. The airline also contributed in a big way to support the government’s ‘Krishi Udan’ and ‘Marine Krishi Udaan’ initiatives, thereby lending a helping hand to Indian farmers, by carrying a record 9662 MTs of shrimp & farm produce during the lockdown period.
On April 7, 2020, SpiceJet operated the India’s first cargo-on-seat flight carrying vital supplies in passenger cabin and belly space. Since then, the airline has been regularly deploying its B737 and Q400 passenger aircraft to carry cargo in the passenger cabin.
SpiceJet’s international cargo network now spans over 44 international destinations that include Almaty, Abu Dhabi, Baghdad, Bahrain, Bangkok, Bishkek, Cambodia, Cairo, Cebu, Chad, Colombo, Dhaka, Doha, Dubai, Guangzhou, Ho Chi Minh, Hong Kong, Huangzhou, Incheon, Jakarta, Kabul, Kathmandu, Khartoum, Kyrgyzstan, Kuala Lumpur, Kuwait, Male, Myanmar, Shanghai, Singapore, Sharjah, Sulaymaniyah, Tashkent, Ukraine, among others. The airline has been actively using Ras Al-Khaimah airport as a hub for its cargo operations.
With an aim to address the increased demand, SpiceJet converted 6 Q400 passenger aircraft into freighters, perfectly suited for operations to Tier II & III cities and to remote and hilly areas in the North East, Jammu & Kashmir, Himachal Pradesh.
Another major milestone for SpiceXpress, the airline’s dedicated cargo arm, was to receive the permission from DGCA to conduct drone trials. With this, the airline aims to provide quicker, faster and cost-effective delivery of medical, pharma and essential supplies and e-commerce products, especially to remote areas.