Despite a weak second quarter, Spicejet’s outlook is positive ahead of the holiday season


In the second quarter ended September 30, losses widened to Rs 837.8 crore for SpiceJet as a spike in fuel prices and the depreciation of the rupee caused turbulence for the budget carrier. SpiceJet had reported a net loss of Rs 561.7 crore in the prior year period

Despite a weak performance in the second quarter of this financial year, the outlook for low-cost airline SpiceJet Ltd is positive given that the third quarter is a seasonally strong quarter. In the second quarter which ended September 30, losses widened to Rs 837.8 crore for SpiceJet as a spike in fuel prices and the depreciation of the rupee caused turbulence for the budget carrier. SpiceJet had reported a net loss of Rs 561.7 crore in the period a year ago.

Total revenue in the second quarter stood at Rs 2,104.7 crore compared to Rs 1,538.7 crore in the same period a year ago. Meanwhile, operating expenses came to Rs 2,942.6 crore in the quarter from Rs 2,100.4 crore a year ago, PTI reported.

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In calendar year 2022, SpiceJet shares are also down 43%. The 85% passenger load offered some cushion as it was higher than IndiGo’s 79%. IndiGo is the country’s largest national airline by market share.

Despite the weak performance, analysts believe the low-cost airline’s returns will improve in the third quarter thanks to strong demand during the winter season.

“We expect (SpiceJet’s) returns to improve, given festive demand, in conjunction with improved operating profitability as restructuring benefits kick in from Q3FY23,” Mint said quoting Nuvama Research analysts in a Nov. 15 report.

The addition of the 737-8 MAX aircraft to SpiceJet’s fleet is likely to boost the airline’s competitiveness as it can accommodate more people with its higher capacity of 220 seats compared to 180 in 737 NG and also has greater efficiency. 20% higher energy.

The increase in the Emergency Credit Line Guarantee Scheme (ECLGS) limit to Rs 1,500 crore by the government would provide some support to SpiceJet.

“After reaching a series of settlements with most of our key partners and the upcoming divestiture of our cargo and logistics arm, we expect significant improvements to our operating environment,” said SpiceJet Chairman and Chief Executive Officer Ajay. Singh, quoted by PTI.

(Edited by : Sudarsanan Mani)


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