Flying with the least number of passengers in April, May burns a $100 million hole in SpiceJet’s books
- The Gurugram-based airline has widened its loss in the last five quarters as travel restrictions remain across the globe.
- The company flew with the least number of passengers in April and May compared to the previous months of 2021.
- Shares of
SpiceJetwere down 4.4% as investors were disappointed with the airline’s financial performance.
Business operations of the airline industry have been highly affected as the government has restricted travel due to the continued impact of the pandemic.
The company’s chairman and managing director (MD) indicated that it struggled to sell its tickets in the last five quarters. “The last five quarters have been the most difficult phase ever for SpiceJet as aviation remained the worst‐hit sector during the second wave as well. Q1 [first quarter] was severely impacted by the second wave as passenger traffic almost disappeared,” said Ajay Singh, MD and chairman in the earnings release.
AdvertisementThe company was able to utilise its passenger capacity much better than its peer Interglobe Aviation (Indigo).
Passenger load factor (PLF), is an airline industry metric that measures how much of an airline’s passenger carrying capacity is used. And here SpiceJet’s capacity utilisation hovered between 64-78% while Indigo’s capacity remained less than 60% in the last two months.
In fact, SpiceJet’s best passenger load factor was best amongst all airlines in the country during the quarter. The average domestic load factor for the quarter was 69.5%.
SpiceJet and Indigo are low cost airlines, which are budget-friendly.
Both the low cost airlines have been incurring loss. especially in the last 15 months, which saw major travel restrictions across countries.
AdvertisementSpiceJet reported a loss of ₹731 crore in June quarter of this year, which widened from ₹256 crore loss in March quarter and ₹600 crore in June quarter of 2020.
Shares of the company were also affected with its disappointing June quarter results. The stock was down 4% at ₹69 at 1:24 p.m., on Monday, August 16.
At a time when the company is unable to sell its passenger tickets, it is filling up its cargos to make some money. SpiceXpress reported a profit of ₹30 crore in June quarter.
SpiceXpress is the dedicated air cargo service that provides integrated logistics solutions. Its network spans over 68 domestic and 111 international destinations including US, Europe and Africa. In the June quarter it carried more than 43,000 tonnes of cargo.
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