SpiceJet ’s shares plunged after its CFO resigned and the company reported wider losses in Q1FY23.- SpiceJet’s shares have already lost over a third of their value in 2022 so far.
- Multiple safety scares have already harmed SpiceJet’s reputation, with 4 in 10 people saying they are avoiding the airline.
Within an hour of the market opening, it shed as much as ₹400 crore of its market cap, but recovered most of its losses to close down by ₹90 crore at the end of the day.
The airline declared a net loss of ₹789 crore in Q1 FY23 yesterday, despite a revenue growth of 126% year-on-year to ₹2,457 crore.
SpiceJet had reported a loss of ₹729 crore in Q1 FY22. Its losses widened in Q1 FY23 despite the revenue jump – however, this time it’s not the airline’s inefficiencies to blame, it’s the weaker rupee responsible for nearly half of the loss in the previous quarter, with the airline reporting a one-time forex loss of ₹369 crore.
SpiceJet chairman and managing director Ajay Singh called the recent past as “one of the most severe operating environments”.
“The industry has been witness to one of the most severe operating environments in the recent past, which impacted the progress and recovery made in Q3FY22. Record high ATF (aviation turbine fuel) prices and the depreciating rupee were the major contributors,” Singh said in a statement.
After its CFO Sanjeev resigned, SpiceJet said it has already identified his replacement, and that the vacancy is expected to be filled this month.
In spite of a strong growth in passenger traffic this year, the stock had shed a third of its value in 2022.
SpiceJet has also been trying to raise funds to the tune of ₹1,500-2,000 crore, and freeing up cash via leasing aircraft. The budget airline operator is also trying to evaluate stake sale via qualified institutional placement, among other modes to raise funds for months now.
To make matters worse, SpiceJet has found itself in turbulent skies, too.
SpiceJet’s B737 aircraft operating between Delhi-Nashik today morning returned midway to the city due to an 'autopilot' snag, a DGCA official said. Although the Boeing 737 aircraft landed safely, the airline was involved in multiple safety events in the last few months.
As a result four in 10 people in a survey said they are avoiding SpiceJet and opting for other airlines. The airline also received a notice from the civil aviation authority.
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