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SpiceJet reported a net loss of ₹462.6 crore for the second quarter ended September 30, 2019 against a loss of ₹389.4 crore for the same quarter last year.
In a statement, the airline said that the losses include a loss of ₹180.3 crore due to accounting standard IND-AS116, without which the losses would have been ₹282.3 crore.
SpiceJet added that losses were incurred because of inflated costs as a result of grounding of the Boeing 737 MAX aircraft and a seasonally weak quarter.
The airline reported an operating revenue of ₹2,845.3 crore for the latest quarter against an operating revenue of ₹1,874.8 crore for the corresponding previous quarter. For the comparative period, total expenses were ₹3,536.1 crore as against ₹2,291.5 crore while EBITDAR before exceptional expenses were ₹154.1 crore against a loss of ₹34.9 crore.
Meanwhile, the independent auditors BR Batliboi and Associates have raised concerns about the income of ₹290.85 crore for the six-month period ending September 30 this year including ₹176.71 crore for the quarter ended September 30 this year which SpiceJet has reported.
“In our view, there is no virtual certainty to recognise such other income, as required by paragraph 33 of Ind-AS 37. Had the company not recognised such other income, loss for the quarter and year-to-date from April 1, 2019 to September 30, 2019 would have been higher by ₹1,76.71 crore and ₹290.85 crore respectively, and accumulated losses, as at September 30, 2019, higher by ₹ 290.85 crore,” said the report. The auditors had raised similar objections to SpiceJet’s June 2019 quarter results also.
Slow growth
The airline statement quotes Ajay Singh, Chairman and Managing Director, SpiceJet as saying that with the industry’s growth rate slowing down in the past few months this impact is evident on its bottom line.
He added the continued grounding of the 737 MAX has hit the airline’s growth plans adversely and resulted in inefficient operations and, as a result, increase in costs. He added that the likely return to service of the 737 MAX early next year, as indicated by Boeing recently, would mean that the airline will have more than 25 brand new aircraft at its disposal.
Terming the results as “well contained,” Kiran Koteshwar, Chief Financial Officer, SpiceJet, said: “We have been ultra conservative on the amount of compensation we are seeking from Boeing.”
He declined to give details of what or how much is being sought.
Airline officials said that while fares have seen a good growth during the latest quarter, the airline’s international expansion has put pressure on their ability to price their tickets.
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