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SpiceJet chairman optimistic about airline’s future
September 18th 2020
SpiceJet chairman and managing director, Ajay Singh, said this week there were reasons to be optimistic about the period ahead despite the coronavirus pandemic pushing the airline into the red. Read More »
The Indian LCC reported a net loss of 5.9 billion rupees (US$80 million) for the three months to June 30 compared with a net profit of 2.6 billion rupees in the same months in 2019. Revenue collapsed by 77%, to 7.1 billion rupees, SpiceJet said in a regulatory filing to India's BSE stock exchange this week.
SpiceJet suspended passenger flights from March 25 to May 24, following the Indian government's imposition of travel restrictions in response to COVID-19. Nationwide restrictions have gradually been eased since May 31, but some states have extended rules on domestic travel.
Since its resumption of flights, SpiceJet has maintained its position as India's second largest domestic carrier by passengers carried, reports the country's Directorate General of Civil Aviation (DGCA).
In June, the first full month since domestic flying recommenced, SpiceJet transported 334,000 passengers, representing a market share of 16.8% behind IndiGo (52.8%) and ahead of Air India (12.2%).
The LCC’s market share had eased slightly to 15.7% in July and 13.8% in August. Passenger load factor has improved from 68% in June to 70% in July and 76% in August.
“SpiceJet showed remarkable resilience in dealing with a crisis situation," Singh said in a statement.
"I am confident, as more and more states ease travel restrictions and business activity gets back to normal, there will be a significant improvement in the operating environment for airlines. We are witnessing some early encouraging signs towards recovery."
As elsewhere in the region’s industry, cargo boosted revenue. SpiceJet's financial accounts said the company earned 2.36 billion rupees from cargo operations in the three months to June 30, up 144% from 968.54 million rupees a year ago and a 49.7% improvement from 1.58 million rupees in the three months to March 30.
SpiceJet said it had flown about 7,000 cargo flights – 40% were on international routes – and transported about 50,000 tonnes of cargo since March 25 making it India's top cargo operator. There are 44 destinations in the airline’s international cargo network.
In addition to using the 737 and De Havilland Aircraft of Canada Q400 passenger aircraft on cargo-only flights, SpiceJet has converted six Q400 turboprops into freighters, which it said was "perfectly suited" for operations to Tier II and Tier III cities and remote and hilly areas.
"I expect our cargo business to continue to expand in the coming quarters," Singh said.
On the 737 MAX, SpiceJet said there was a "likely return to service in the fourth quarter of fiscal year 2021 to boost operations".
The U.S. Federal Aviation Administration (FAA), European Union Aviation Safety Agency (EASA) and Transport Canada recently have conducted recertification test flights on the 737 MAX, moving the aircraft type one step closer to returning to flying since its worldwide grounding in March 2019.
Singh said he was "encouraged by the progress made in the re‐entry of Boeing’s MAX aircraft into service".
