SpiceJet reported a consolidated loss of ₹257 crore in the three months ended 31 March as the pandemic sapped demand for domestic air travel while international passenger flights remained restricted.
Net loss, however, narrowed from ₹816.25 crore a year earlier, mainly due to a 37% drop in expenses to ₹2,442.73 crore.
SpiceJet carried nearly 2.96 million domestic passengers in the March quarter, a 44% drop from 5.26 million passengers a year earlier. Consequently, revenue fell 28% from a year earlier to ₹2,185.75 crore.
“To ensure our long term growth and sustainable operation we have decided to raise funds of up to ₹2,500 crore. These funds will be used to significantly strengthen our balance sheet," said Ajay Singh, SpiceJet’s chairman and managing director.
Singh said SpiceJet’s cargo business has performed “extremely well" and “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," he said.
For the year ended 31 March, SpiceJet widened its consolidated net loss to ₹1,029.89 crore from ₹936.57 crore in the previous year. Revenue during FY2021 fell 54% to ₹6,119.39 crore.
Meanwhile, Walker Chandiok & Co LLP— the auditors to SpiceJet— have raised doubts about the airline's ability to continue as a going concern as the mounting losses have led to complete erosion of net worth with current liabilities exceeding current assets by ₹5,185.84 crore.
“These conditions, together with uncertainties relating to the impact of the ongoing covid-19 pandemic on the operations of the company....indicate the existence of a material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern," it said.
The company’s cargo arm, SpiceXpress, saw a significant increase in its revenue to ₹416.5 crore in March 2021 quarter, from ₹67.8 crore a year ago.
Scheduled domestic flight services were suspended in India from 25 March to 24 May last year due to the lockdown. The domestic flights resumed from 25 May 2020, but in a curtailed manner. Scheduled international flights have been suspended in India since 23 March 2020, due to the coronavirus-triggered lockdown.
However, special international passenger flights have been operating under the Vande Bharat Mission since May 2020 and under bilateral air bubble arrangements formed between India and other countries since July 2020.
PTI contributed to the story.
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