Total income fell 8.4% to ₹2,267 crore in the quarter while total expenses decreased by 36% to ₹2,069 crore. The lower expenses were also on account of fewer aircraft in operations. More than 20 SpiceJet planes were grounded in the quarter out of total fleet of 55 planes.

“I am happy that despite facing multiple challenges, we have posted a profit in Q1 FY2024. I firmly believe in the potential of our airline, and I am pleased to have contributed to its growth by infusing ₹500 crore into the company,” said Ajay Singh, chairman and managing director.

Last month, SpiceJet said it will receive a fresh capital infusion of ₹500 crore from promoter Singh. Singh is expected to infuse the funds by subscribing to fresh equity shares and/or convertible instruments.

For the fiscal year ended 31 March, SpiceJet narrowed its losses to ₹1,503 crore from ₹1,725 crore in the year before. Total expenses rose by 23% to ₹11,410 crore while total income rose by 30% to ₹9,897 crore last fiscal.

The airline said it is implementing a range of measures to return its grounded aircraft to service, and is working towards improving selling and distribution, revenue management, fleet rationalization, optimizing aircraft utilization, redeploying capacity in key focus markets, revising management and employee compensation, renegotiating contracts and other cost control steps to establish consistent and profitable operations and cash flows in the future.

As on June-end, SpiceJet recorded negative retained earnings of ₹7,211 crore and negative net worth of ₹3,026 crore. The negative retained earnings are mainly due to adjustments on account of implementation of Ind AS I 16 in FY20, adverse foreign exchange rates, fuel prices, pricing pressures, other business factors and the impact of the pandemic in the last few years, the airline said.

The airline has reiterated the amount under dispute with aircraft lessors have not been considered as debt and the company is optimistic about the outcome of the pending legal matters.

“Certain aircraft/engine lessors have filed application(s) under Section 9 of the Insolvency and Bankruptcy Code, 2016 due to alleged non-payment. The Company has certain disputes in the matter and the amounts claimed are not debts and accordingly the company is defending such matters. Basis the review of applications filed and the legal interpretation of the law supported by views of legal expert, the management is of the view that there are fair chances of having a favourable outcome for the company,” SpiceJet said.

Under the emergency credit line guarantee scheme (ECLGS), SpiceJet has received funds aggregating to ₹211 crore until 31 December, 2022. Further, the company has received ₹91.3 crore under the ECLGS scheme during the quarter ended 31 March 2023. In the current fiscal year, the airline said that it has received disbursement of additional funds aggregating to ₹541.3 crore as eligible under the ECLGS scheme. It has also initiated the process for issue of fresh equity/equity warrants to the promoter group for value aggregating to ₹500 crore and is further considering raising of fresh capital through issue of eligible securities to qualified institutional buyer, in accordance with applicable law.

“The part of above proceeds will be used in maintenance of its grounded fleet for getting these aircraft return to service which will lead to additional revenue. Additionally, the company is in process of seeking shareholder approval to issue equity shares to one of the large lessor against some of its outstanding dues,” the airline said.

In the auditor’s note, while the auditor has said that it will be unable to comment on the adjustments, if any, with respect to the legal matter between SpiceJet and its former promoters KAL Airways and the Maran Group, it has commented on the net worth of the airline.

Updated: 15 Aug 2023, 12:21 AM IST