SpiceJet reported consolidated loss of Rs 257 crore in Q4FY21 (Jan-March2021 quarter) due to lower than expected revenues, lower yield and low volumes in the cargo business. The airline loss was higher than expected and revenues were lower than expected. Q4 consolidated loss of Rs 257 crore widened versus loss of Rs 68crore in the last quarter however, the loss did narrow from Rs 816 crore reported in the same quarter last year.
The airline has managed to reduce net loss YoY in Q4 by restructuring contracts which will have a significant positive impact in the long term. SpiceJet had the best passenger load factor amongst all airlines in the country. The average domestic load factor for the quarter was 77.3% while for fiscal 2021 it was 75.7%.
The airline business continues to be severely hit due to the impact of Covid second wave which has hit operations and travel demand. While there has been a significant loss on the passenger side of the business the Cargo business reported strong performance. In order to stay afloat SpiceJet announced plans to raise Rs 2500 crore via QIP and plans to hive off its cargo business into a separate entity.
Ajay Singh, Chairman and Managing Director, SpiceJet, said, “The intensity with which the second wave of Covid-19 struck and the unimaginable devastation it has caused, both for the already battered travel industry and generally, will take time to heal. To ensure our long term growth and sustainable operation we have decided to raise funds of up to INR 2,500 Crore. These funds will be used to significantly strengthen our balance sheet.”
Singh said, “Much like the first wave, this time too, our cargo arm was exceptionally active and has performed extremely well transporting record quantities of supplies all across the globe. In order to provide greater focus to cargo business and raise additional capital, we will hive-off the cargo business to operate as a separate entity. The same will provide greater opportunity and flexibility in pursuing long term growth plan and strategies for the cargo business.”
The Cargo business reported strong performance in Q4FY21 with Revenues of Rs 416 crore versus Rs 68 crore in same quarter last year (YoY) and reported profit of Rs 40 crore versus loss of about Rs 60crore YoY. The airline carried 39693 tonnes of cargo during Q4 which was down 3.8% on a sequential basis (QoQ). For the full year FY21 cargo business profits stood at Rs 131crore against loss of Rs 134cr YoY and Revenues increased by 518% to Rs 1117.5crore.
The Company continues to incur various costs owing to the grounding and the inability of Boeing 737 Max aircraft to undertake revenue operations for over two years now.
01/07/21 Poonam Saney/ETNowNews.com
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