SpiceJet has posted a consolidated net profit of ₹110 crore for the Q3 FY23, compared to a net loss of ₹833 crore in the same quarter the corresponding year. The Ajay Singh-promoted airline’s revenue from operations stood at ₹2263.40 crore for the December quarter, compared to ₹2,204 crore last year. It’s stocks rose intraday by 12 per cent to ₹39.65 on the BSE.

The airline’s expenses during the quarter stood at ₹2,712.26 crore for the quarter in review, compared to its expenses which stood at ₹2,557 crore. 

Ajay Singh, Chairman and Managing Director, SpiceJet, said: “I am happy that SpiceJet has reported a profit in Q3 FY23. We exceeded our operational targets and continued with our unmatched performance, clocking the highest load factor for every single month in 2022. The profits have been driven by a strong performance in both our passenger and cargo businesses. There are renewed signs of recovery and some very positive developments and restructuring initiatives in the immediate offing that would significantly strengthen and deleverage our balance sheet.

“Air travel has come roaring back touching newer heights and giving a glimpse of the huge potential of the Indian aviation market and we look forward to a robust and exciting 2023.”

SpiceXpress, its cargo arm, posted a revenues of ₹120 crore in the reported quarter. It posted a net profit of ₹12 crore with a constant profit margin increase of 10 per cent quarter on quarter.

The company had received funds aggregating to ₹1,509.80 million in the current quarter and ₹600.00 million during the previous quarter under Emergency Credit Line Guarantee Scheme (ECLGS’) scheme. 

Additionally, the company has been sanctioned ₹128 crore under ECLGS scheme, and the same is being disbursed during January-February 2023. Further, the company is in advance discussions with banks for sanction and disbursement of additional funds aggregating to ₹763 crore as eligible under ECLGS scheme. 

‘To raise capital’

However, the company said that “the Board is considering raising of fresh capital through issue of eligible securities to qualified institutional buyer, in accordance with applicable law. Based on the foregoing and their effect on business plans and cash flow projections, the management is of the view that the company will be able to achieve profitable operations and raise funds as necessary, in order to meet its liabilities as they fall due. These conditions indicate the existence of uncertainty that may create doubt about the company’s ability to continue as a going concern”.

However, “based on the factors mentioned in this note, including re-negotiation of payment terms to various parties and raising of additional funds, the management is of the view that the going concern basis of accounting is appropriate. The auditors have included ‘Material Uncertainty Related to Going Concern’ paragraph in their review report”.

Two days ago, SpiceJet said that Carlyle Aviation, the largest lessor to the low cost carrier, will probably convert its dues into compulsory convertible debentures in SpiceXpress. SpiceXpress’ market value will exceed $1 billion if the SpiceJet board approves debt conversion. Additionally, the conversion will also aid in the reduction of the debt for SpiceJet. This may be a respite for the airline.