NEW DELHI: Budget airline SpiceJet has reported a loss of Rs 57 crore in the October-December 2020 period, as opposed to a profit of Rs 73 in same quarter last fiscal.
SpiceJet has seen its losses fall from Rs 600.5 crore in the lockdown-impacted Q1 to Rs 112.6 crore in Q2 and Rs 57 crore in Q3 — a combined loss of Rs 770 crore in first nine months of this pandemic fiscal.
Shares of SpiceJet closed 1.1% up at Rs 87.85 on BSE on Wednesday, when the broader market was almost flat.
SpiceJet chairman and managing director Ajay Singh said: “…we are confident that things will only get better for us from now on. We have successfully managed to trim down our losses considerably with each passing quarter despite limited operations and muted demand… With our cargo business proving its true potential, the passenger business getting back on track significantly and a tight control on costs, we have managed to reduce our losses significantly in this quarter…”
The auditor’s report says the airline has factored in some “other income” of which there is no “certainty” of receiving. Had that not been accounted for in the result, the Q3 loss would be higher by Rs 151 crore, the auditor says — meaning the October-December, 2020, loss could have been Rs 208 crore.
The only other listed and operational Indian airline, IndiGo, has lost Rs 4,659 crore in the first nine months of this fiscal. The daily loss of these two listed carriers is almost Rs 20 crore daily.
Most Indian carriers are struggling to survive. The auditor has cast doubts on SpiceJet’s viability given its financial health.
On December 31, 2020, SpiceJet’s “accumulated losses amounts to Rs 3,960.2 crore which have resulted in complete erosion of its net worth and the current liabilities have exceeded its current assets by Rs 4,778.3 crore as at December 31, 2020. These conditions, together with uncertainties relating to the impact of the ongoing Covid-19 pandemic…, indicate the existence of a material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern. However… (SpiceJet) management is of the view that the going concern basis of accounting is appropriate. Our conclusion above is not modified in respect of this matter,” auditor Walker Chandiok & Co LLP says in its independent review report of SpiceJet Q3 results.
The auditor says SpiceJet has “recognised other income of Rs 140.3 crore and Rs 419.2 crore for the quarter and nine months period ended December 31, 2020, respectively. (These include reimbursement for expense incurred on the grounded Boeing 737 Max)… there is no virtual certainty to recognise such other income and related receivable… Had the company not recognised such other income, the reported loss for the quarter and nine months period ended December 31, 2020, would have been higher by Rs 150.97 crore and Rs 447.05 crore, respectively.”