SpiceJet Q2 loss widens to Rs 463 crore
SpiceJet also said that the airline’s losses were higher due to new accounting standard norms and grounding of Boeing 737 MAX.
Losses widened despite airline registering a 52% rise in second quarter operational revenue to Rs 2,845.3 crore as it added more destinations and expanded its fleet of passenger and freighter aircraft.
Indian airlines are registering losses due to low passenger yields, as airlines compete with each other to fill their planes. SpiceJet’s low-cost peer IndiGo, which is country’s largest domestic airline, had also reported highest-ever losses of over Rs 1,062 crore.
SpiceJet also said that the airline’s losses were higher due to new accounting standard norms and grounding of Boeing 737 MAX. “This loss includes a loss of Rs 180.3 Crore on account of accounting standard IND-AS116; without which the Loss is Rs 282.3 Crore,” the airline said in a statement.
The airline has also said that it is in the process of seeking a claim from the aircraft manufacturer.
“With the grounding of Boeing 737 MAX, the company continues to incur various costs and losses with respect to these aircraft. The company is in the process of determining the costs and losses (including opportunity losses) incurred by it and has initiated the process of seeking reimbursements and claims from the aircraft manufacturer,” the airline said.
SpiceJet says that the future for aviation, as it enters the peak travel phase, looks better with a hope that the demand in the economy is also set to revive.
“With the industry’s growth rate slowing down in the past few months the impact is evident on the bottom line. We, however, remain optimistic that the sector will regain the lost momentum as the inherent demand remains very strong,” SpiceJet Chairman and Managing Director Ajay Singh was quoted in the release.
The airline expects return of Boeing 737 MAX will fuel its growth momentum.
“The likely return to service of the 737 MAX early next year, and as indicated by Boeing recently, would mean that SpiceJet has at its disposal more than 25 brand new planes and we look forward to it. The return of the 737 MAX will provide a huge boost to our operations and we are confident that with the rigorous scrutiny, the MAX will be one of the safest airplanes ever to fly,” Singh was further quoted in the release.