The future of SpiceJet will depend on how much fund infusion is possible from promoters, banks or additional investors. In a market which is growing steadily, capacity will always be the king but capacity can only be added if there is money.
Ameya Joshi
Published16 Jul 2024, 05:05 PM IST
SpiceJet declared a loss of ₹409 crore in FY24.(REUTERS)
SpiceJet, now a shadow of its former self, declared its Q3, Q4 and full-year FY24 results on July 15, 2024. This is not the first time that the airline has delayed its results and has now become a habitual offender when it comes to delaying results. The airline declared a loss of ₹409 crore in FY24, while it recorded a profit in Q4 ( ₹119 crore) and a loss in Q3 ( ₹301 crore). The auditors continued their remarks casting significant doubt on the company continuing to be a going concern.
This comes after hiving off its subsidiary SpiceXpress on a slump sale basis and fund infusion from a sizable number of investors over the first few months of this calendar year. However, from its near-death experience in December 2014 to now, its accumulated losses have more than doubled to ₹7,812.5 crore. At the end of March 2015, after coming out of its near-death experience in December 2014, SpiceJet had accumulated losses of ₹3,210 crore.
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What exactly broke its back?
For what was once a young and vibrant brand with orders for over 200 aircraft with Boeing aimed at fleet renewal and seeing multiple changes in ownerships, what exactly went wrong? The first was the grounding of the MAX aircraft following two fatal crashes. The airline had 13 MAX 8 aircraft in its fleet when the aircraft was grounded worldwide. This meant a sudden reduction in schedules and putting the brakes on its fleet renewal. The airline was often criticised for including large sums of money in its other income which was a potential compensation from Boeing but not yet formalised, and thus helping avoid larger accumulated losses.