spicejet ltd unexpectedly reported a four fold jump in earnings 106.8 crore for the December quarter, thanks to strong demand and higher fares, shares of the low-fare airline soared 12.3% on Friday.
Profit for the quarter was driven by passenger operations rather than cargo operations, in contrast to the year-ago December quarter. While revenue from air transport services increased by 31% 2,202 crore, revenue from freight and logistics services, SpiceXpress, fell by 80% 119.6 crores.
The December quarter is traditionally a strong one for airlines as the start of festivals and the holiday season boost air travel. The quarter saw a steep rise in airfares due to record passenger demand and helped Indian airlines such as IndiGo post record profits, and privately held Vistara said it has broken even for the first time since inception.
For SpiceJet, total income from operations grew by 6% 2.829.5 crore in the quarter. Total revenue from operations out of this 2,314.6 crore, and other income was 514.9 crores. The airline attributed the other income to an agreement with Boeing for 13 grounded MAX aircraft and waiver of lease rentals on some aircraft that were showing technical issues and were then returned during the period.
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Total expenses increased by 5.6% for the quarter 2,722.7 crores. SpiceJet said that despite a jump in passenger traffic, high fuel prices and a depreciating rupee have affected business. However, it expects travel demand to continue into 2023.
“There are new signs of recovery and some very positive growth and restructuring initiatives closing immediately that will significantly strengthen and deleverage our balance sheet,” said Ajay Singh, chairman and managing director.
received about the airline 211 crore so far under the Emergency Credit Line Guarantee Scheme (ECLGS). It is also in talks with aircraft lessor Carlyle Aviation to offer a 5% stake. As per the proposal, Carlyle Aviation will convert approximately 75% of SpiceJet’s $100 million outstanding or approximately 75% into SpiceXpress into compulsorily convertible debentures, and the remaining amount will be converted into equity not exceeding 5% in SpiceJet. Peppermint Reported on 23 February.
The company’s board will meet again on February 27 to consider the sale of shares on a preferential basis.
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