Mumbai: In the middle of an ownership change, budget airline SpiceJet on Thursday reported a steep 59 percent rise in its third-quarter net loss at Rs 275 crore on lower passenger numbers and a one-time cost of Rs 295 crore.
The cash-strapped airline was forced to ground flights for some days during the quarter after its vendors refused to offer credit. This resulted in the airline witnessing a 31 percent decline in capacity, while revenue fell 27 percent to Rs 1,300 crore, from Rs 1,769 crore in the year-ago quarter.
The net loss has widened from Rs 173 crore during the September-December 2013 quarter, said the airline whose co-founder Ajay Singh has returned as its promoter after buying stake from the Maran family.
The finance cost of the airline also went up sharply to over Rs 47 crore in the quarter ended December 31, 2014, from a little over Rs 30 crore in the year-ago period, while the airline had to bear one-off and exceptional expenses totalling Rs 295 crore in the latest three-month period.
The passenger revenue was down 28 percent, while ancillary revenues fell by 20 percent.
However the load factor was up 18 percent, taking the total RASK (revenue per available seat km) up 5 percent. Still, the airline's revenue per kilometre slipped 12 percent due to cancellations and clubbing of flights that resulted in less capacity available to sell at high yield in peak season.
Total CASK (cost per available seat km) rose 16 percent, while fuel cost came down by 14 percent, but non-fuel CASK rose 42 percent due to one-offs and exceptional costs, and unabsorbed fixed costs and overheads over 31 percent which reduced capacity.
Excluding one-off and exceptional items, the non-fuel CASK rose 8 percent, driven by fixed costs and overheads that had to be absorbed over a lower ASK base.
EBITDA for the quarter was negative at Rs 195 crore, but EBITDAR was positive at Rs 20 crore (compared to negative Rs 110 crore and a positive Rs 162crore respectively last year).
The high losses came despite a turnaround in the aviation industry across the globe and also in the domestic market following the almost 50 percent cheaper aviation fuel, which typically constitutes almost 50 percent of the operational cost of airlines.
"Excluding one-off and exceptional costs of Rs 295 crore, company would have achieved net profit of Rs 20 crore, compared to net loss of Rs 172.8 crore in the same quarter previous year," the airline said.
"One-off and exceptional items include provisions for impact of fleet reduction and early contract terminations that significantly impacted the quarter's numbers," Chief Operating Officer Sanjiv Kapoor said in a statement.
He attributed these to the "extremely challenging quarter" due to legacy issues, accumulated losses, and delays in expected and required re-capitalization, forcing the airline to trim fleet, and consequential cancellations of flights in what is traditionally one of the best quarters of the year.
Chief Financial Officer Kiran Koteshwar said, "The impact of fleet reductions negatively impacted both revenues and costs, as we had to combine flights to handle cancellations which severely limited available inventory to sell at high yields during peak season, while having to incur distress costs and absorb fixed costs and overheads over a much lower capacity base.
"Further, to quantify and account for liabilities related to early terminations of contracts, we have provisioned for costs related to those terminations where deemed necessary."
Koteshwar, however, claimed that despite the fleet reduction-related challenges, the airline clocked 5 percent higher unit revenue on a y-o-y basis.
