SpiceJet cargo revenues catapult 518% in FY21
The revenue from cargo operations increased by 518 percent aggregating to INR 1,117.5 crore for FY2021 with profit of INR 130.9 crore for the full year against a loss of INR 134.2 crore for the previous year.
SpiceJet reported a net loss of INR 235.3 crore in the fourth quarter of FY21 against a loss of INR 807.1 crore in the same quarter of the previous year as business continues to be severely impacted by the second wave of Covid-19 pandemic which has adversely hit operations and travel demand. The airline reported a net loss of INR 998.3 crore in FY2021.
While there has been significant losses suffered on the passenger side of business, the dedicated cargo operations continued to provide much required lifeline to its overall operations. On a segment basis the revenue from cargo operations increased by 518 percent aggregating to INR 1,117.5 crore for FY2021 with profit of INR 130.9 crore for the full year against a loss of INR 134.2 crore for the previous year. With the second wave of the pandemic and the emergence of various mutant variants, the company continues to see significant negative impact to demand for air travel. However, even as the company continues to monitor the impact of the pandemic on its operations and financial condition, it has also been implementing various mitigation strategies to protect its long-term sustainability.
The company continues to incur various costs owing to the grounding and the inability of Boeing 737 Max aircraft to undertake revenue operations for over two years now. SpiceJet continues to engage with Boeing to recover damages incurred by the company due to the grounding of the MAX and also engage with aircraft lessor of the grounded MAX aircraft to restructure the present leases.
Ajay Singh, chairman and managing director, SpiceJet, said, “The intensity with which the second wave of Covid-19 struck and the unimaginable devastation it has caused, both for the already battered travel industry and generally, will take time to heal. To ensure our long term growth and sustainable operation we have decided to raise funds of up to INR 2,500 crore. These funds will be used to significantly strengthen our balance sheet.”
“Much like the first wave, this time too, our cargo arm was exceptionally active and has performed extremely well transporting record quantities of supplies all across the globe. In order to provide greater focus to cargo business and raise additional capital, we will hive-off the cargo business to operate as a separate entity. The same will provide greater opportunity and flexibility in pursuing long term growth plan and strategies for the cargo business.”
“With vaccination touching record numbers and travel demand slowly picking up, we hope that the worst is behind us but we remain extremely cautious about the future. While there is still much work and recovery to be done we have managed to reduce our net loss in Q4 through re-structuring of our contracts which will have a significant positive impact in the long term.”
In terms of operational parameters, SpiceJet had the best passenger load factor amongst all airlines in the country. The average domestic load factor for the quarter was 77.3 percent while for fiscal 2021 it was 75.7 percent.