Improved passenger demand and better logistics operations saw budget airlines, SpiceJet beat market expectations as it swung into profits. The carrier reported a standalone net profit of ₹23.28 crore for the quarter ending December 31, 2021 after reporting losses for multiple Covid-hit quarters.

Net loss in the year-ago-period stood at ₹57 crore.

On a consolidated basis, SpiceJet reported a net profit of ₹42.45 crore in Q3FY22, against a loss of ₹67 crore. The airlines in a statement said, a one time settlement of ₹77 crore dragged down profits.

The airlines shares staged a strong comeback with the stock recovering from a 52-week low of ₹56.25. It closed at 64, up over 8 per cent, on Tuesday.

During the quarter under review, the airline saw a near 35 per cent jump in standalone revenue to ₹2,201 crore; as against ₹1,631 crore in the year-ago-period. On a consolidated basis, the revenue in Q3-FY22 saw a similar 35 per cent y-o-y jump to ₹2,205 core.

SpiceJet had a passenger load factor of 85.2 per cent; and it launched 40 new routes in Q3FY22.

SpiceXpress, the company’s logistics platform, reported a revenue of ₹584 crore for the quarter, and the company plans to significantly increase freighter capacity in the coming quarters, it said in a statement

According to Ajay Singh, Chairman and Managing Director, SpiceJet, profits in Q3-FY22 came on the back of excellent logistics operations, rebound in passenger traffic and various accommodations from aircraft manufacturer and lessors.

Passenger demand

According to him, the passenger industry witnessed the much needed turnaround in third quarter as Covid cases ebbed in the first half of the October to December period and travel picked up significantly. However, by the second half of December, a wave of Omicron-led infections halted that recovery.

However, “renewed signs of recovery in the passenger segment is visible; whole logistics operations “remain strong”.

“Our performance would have been much better but was impacted by the unexpected delay in the return to service of the 737 MAX, rising fuel costs and certain exceptional adjustments. I am happy to say that there are renewed signs of recovery in the passenger segment and the logistics segment continues to remain strong,” Singh said.

Boeing resolution

The settlement with Boeing was a significant event during the quarter, SpiceJet’s CMD said.

The company received cash and non-cash accommodations significantly in excess of the amounts due to lessors during the period of grounding of MAX aircraft. The settlement not only brought back into operations the grounded 737 MAX aircraft but also paves way for the induction of more efficient and younger MAX aircraft into SpiceJet’s fleet.

“The settlement also ensures the resumption of new aircraft deliveries from our order of 155 MAX aircraft,” Singh said adding that the airline is now aiming for a stronger comeback in 2022 “by utilising and expanding its 737 MAX fleet for better yield and flying experience”.

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