SpiceJet cruises past Covid-19 clouds, shines brighter than IndiGo
SpiceJet has put up a stellar performance on numerous fronts from financial numbers to Covid vaccine delivery
Carrying on with its remarkable run in a year when Covid-19 has left the biggest and mightiest airlines badly battered and bruised, SpiceJet, India's second-largest airline, has reported stellar numbers in its third-quarter results beating estimates and halving its net loss to Rs 57 crore.
In comparison, IndiGo, the only other listed Indian airline, reported a humongous loss of Rs 620 crore for the quarter ended December 31, 2020.
A comparison of the results of two of India's largest airlines gives a broad picture of how SpiceJet has managed to rise from the deadly impact of the pandemic while others may still not yet be out of the woods.
SpiceJet had reported a loss of Rs 112.6 crore in the second quarter and a Rs 593 crore loss in the first quarter as Covid-19 resulted in a country-wide lockdown grounding airline operations completely. In comparison, IndiGo reported a Rs 2,844 crore loss in Q1 followed by a Rs 1,195 crore loss in the September quarter. This means that India's biggest airline has lost Rs 4,659 crore -- almost Rs 17 crore daily -- in the first nine months of this fiscal.
SpiceJet CMD Ajay Singh. Image courtesy: Twitter/@SwamiGeetika
"No doubt, SpiceJet has demonstrated great resilience. Their performance has stood apart. Their Q3 results have beaten all estimates," said an analyst who closely tracks the aviation space.
In the third quarter, SpiceJet reported a total income was Rs 1,907 crore as against Rs 1,305 crore in Q2 FY21. For the same period of comparison, its expenses were Rs 1,964 crore as against Rs 1,418 crore. On an EBITDA basis, SpiceJet achieved a profit of Rs 451.4 crore for the reported quarter as against Rs 442 crore in the previous quarter. On an EBITDAR basis, the airline's profit was Rs 518.4 crore for the reported quarter as against a profit of Rs 475 crore in Q2 FY21.
Interestingly, revenues from cargo increased by 447% year-on-year while on the passenger side, the airline, once again, registered the industry's highest domestic load factor of 76.8%. SpiceJet also recorded the highest overall load factor of 77.9% (including domestic and international operations).
Despite muted demand, passenger revenue grew by 73% quarter-on-quarter while it continued to maintain a lead over IndiGo in passenger RASK (revenue per available seat kilometre). The airline continued to generate significant revenue through charter business.
A SpiceJet plane on January 12 carried the first batch of India's Covid-19 vaccines to Delhi. Image courtesy: DIAL
"We are confident that things will only get better for us from now on," said Ajay Singh, Chairman and Managing Director, SpiceJet.
"We have successfully managed to trim down our losses considerably with each passing quarter despite limited operations and muted demand. SpiceJet yet again recorded the industry's highest domestic load factor and has also demonstrated market leadership in passenger RASK amongst listed Indian peers."
SpiceJet, the country's biggest cargo operator, maintained its leadership position in cargo and emerged as the preferred airline for transportation of Covid-19 vaccine. It has transported 13.2 million Covid-19 vaccine doses to date. Overall, the airline has operated more than 14,000 cargo flights and carried 1,15,500 tonnes of cargo since the lockdown began on March 25, 2020. In Q3 alone, it carried 41,257 tonnes of cargo.
SpiceJet operates a fleet of 19 cargo planes which includes five wide-body aircraft. SpiceJet is the first and only Indian carrier to introduce dedicated cargo flights to Leh ensuring a timely and seamless supply of essentials during winters.
"We proudly carried India's first consignment of Covid-19 vaccine on January 12 and have transported 13.2 million doses till date and will continue to actively participate in the transport of vaccines both within and outside the country in the weeks and months to come. SpiceJet also expects to re-induct a significant number of Max aircraft with the imminent re-certification of this aircraft by regulatory agencies," Singh said.
"With our cargo business proving its true potential, the passenger business getting back on track significantly and (with) a tight control on costs, we have managed to reduce our losses significantly in this quarter. There has been a remarkable recovery from where we were a few months back and with the world's biggest vaccination drive underway, I see a strong revival across sectors. Our results are reflective of the massive exercise being undertaken by the company to align our cost base and we continue to explore and implement best practices to further bring operational efficiency and accomplish best cost base in the industry," said a confident Singh.
The return of the Boeing 737 Max aircraft which has already been cleared by the American and European safety regulators will further boost SpiceJet.
SpiceJet introduced 92 new domestic and 16 international flights during the last quarter and added Ras Al Khaimah as its 12th international destination. In line with its commitment to enhancing regional connectivity, the airline said it added Darbhanga and Nashik as its latest Ude Desk ka Aam Naagrik (UDAN) destinations. Providing a major boost to tourism, SpiceJet launched its seaplane service called Spice Shuttle between Ahmedabad (Sabarmati riverfront) and the Statue of Unity in Kevadia, Gujarat.
To ensure seamless delivery of the Covid-19 vaccine both within and outside the country, SpiceJet has tied up with multiple partners including Brussels airport, GMR Hyderabad Air Cargo (GHAC), Adani Ahmedabad International Airport among others. The airline has also tied-up with global leaders in cold chain solutions offering active and passive packaging and has the capability to transport extremely sensitive drugs and vaccines in controlled temperatures ranging from -40°C to +25°C.
(Cover image courtesy Wikimedia Commons/Andrew Thomas)