Rumour mills agog as Spicejet sits over March-end results
Budget carrier SpiceJet with a fleet size of 95 planes reported a net profit of Rs 23.28 crore in the quarter ended December in FY2022.
New Delhi, July 23 Budget carrier SpiceJet with a fleet size of 95 planes reported a net profit of Rs 23.28 crore in the quarter ended December in FY2022.
But industry sources said that the Covid pandemic hit the aviation sector badly and SpiceJet too is not untouched by the financial stress.
While the airline has not come out with its Q4 FY2022 results, some industry sources claimed that when announced, the results will truly disclose its financial condition.
SpiceJet planes recorded passenger load factor or occupancy of 84.1 per cent in June when it had a market share of 9.5 per cent.
While the airline has claimed that the March results are delayed due to a ransomware attack on its system, industry sources said the airline is under financial stress.
Industry sources and experts said that fleet deployment and oversight is very crucial in the aviation sector. During the Covid pandemic, most of the aircraft were lying idle and many airlines resorted to cost-cutting and retrenchment of employees to cope with the financial crisis.
Now, there is a sudden surge in demand which the airlines are finding difficult to manage, leading to a rising number of technical malfunctions.
Jitender Bhargava, former Executive Director of Air India, said that given the current situation, it is very difficult to reach the breakeven point for many airlines in the country.
"In India, every airline wants to fill its seats and in that process they keep the fare low. Covid has impacted the health of the sector badly. Also, the rate of aviation fuel has been on the higher side. All these things have impacted the financials of the airlines," Bhargava said.
When asked about the possibility of lack of trained staff or proper checking for technical snags, a Spicejet spokesperson said, "Absolutely not. Last month all our planes were audited by the DGCA and they were found to be absolutely safe."
When asked about the steps being taken by the airline to avoid untoward incidents, the spokesperson said, "We are committed to ensuring a safe operation for our passengers and crew. All our aircraft were audited a month ago by the regulator and were found to be safe. Preventive actions are formulated, implemented and audited frequently to ensure no recurrence of a similar nature occurs in the future."
When asked whether entry of new players, including Akasa Air and Jet Airways, has led to man-power shortage, the spokesperson replied, "SpiceJet has one of the lowest attrition rates in the industry and we have more than sufficient number of technicians and engineers who are doing a great job."
SpiceJet reported a net profit of Rs 23.28 crore in the quarter ended December 2021, despite one-time exceptional adjustment of Rs 77.46 crore on account of settlement for the quarter under review.
"Our performance would have been much better, but it was impacted by the unexpected delay in the return to service of the 737 MAX, rising fuel costs and certain exceptional adjustments," said the airline.
SpiceJet also launched 40 new routes and added Kushinagar as an UDAN destination, becoming the first Indian airline to start flights from the newest airport.
Meanwhile, many incidents involving engineering malfunctioning were reported in the past couple of months. Taking note of air safety related incidents, aviation regulator DGCA had issued a showcause notice to SpiceJet in the first week of July.
In its notice, DGCA had said that the various incidents have been reviewed, and it was found that poor internal safety oversight and inadequate maintenance actions resulted in degradation of safety margins.