Home / Markets / Stock Markets /  SpiceJet shares jump on report of likely receiving additional govt loan

Shares of SpiceJet Ltd surged about 9% to 42 apiece on the BSE in Thursday's opening deals after a report said that the Indian budget airline carrier is expected to receive an additional 1,000 crore loan under the government's modified Emergency Credit Line Guarantee Scheme (ECLGS) as the airline is in need of funds to sustain heavy cost burden and pay pending dues.

The funds will help the domestic airline clear its dues, pay lessors on time and induct new Boeing 737 Max planes, a Mint report suggested on Wednesday. The airline has also been in discussions with bankers to raise $200 million, the report added.

The finance ministry has modified the Emergency Credit Line Guarantee Scheme (ECLGS) to enhance the maximum loan amount eligibility for airlines under ECLGS 3.0 to 100% of their fund based or non-fund-based loan outstanding as on the reference dates or Rs. 1,500 crore, whichever is lower; and of the above, 500 crore shall be considered, based on equity contribution by the owner.

SpiceJet has welcomed the changes made in the ECLGS for the civil aviation sector but has asked the government to extend support on jet fuel as well. “This will provide a tremendous boost for airlines. I request the government once again for its support for including Aviation Turbine Fuel under GST, which would be a game changer for the entire sector," Ajay Singh, Chairman and Managing Director, SpiceJet said.

For the first quarter ended June 2022, the low-cost carrier reported widening of net loss at 789 crore as high fuel prices and rupee depreciation adversely impacted the budget carrier. SpiceJet had a net loss of 729 crore in the quarter ended June 2021.

Meanwhile, its total revenue for the reported quarter was 2,478 crore as against 1,266 crore, a year-on-year (YoY) growth of 126%. The airline also took note of resignation of Sanjeev Taneja, Chief Financial Officer of the Company, with effect from August 31, 2022.

In terms of operational parameters, SpiceJet had the highest passenger load factor amongst all airlines in the country. The average domestic load factor for the quarter ending March 31, 2022 was 83.3% while for FY2022 it was 80.4%. SpiceJet had the highest PLF of 86.43% in Q1 FY2023.

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