SpiceJet reported a ₹562 crore ($75.5mn) loss for the second fiscal quarter of 2021, reducing losses quarter-on-quarter but drastically increasing year-on-year. The carrier also reported a 23% increase in revenue as passengers began returning to the skies. Let's take a closer look at the airline's latest results.

Recent improvements

In its latest results released this week, SpiceJet showed a marked improvement over the crippling first quarter (April-June) of this year. After the second wave of COVID decimated air travel, the second quarter (June-September) saw travelers return to the skies in a rising manner. While June saw slower traffic, by August, airlines were seeing a rapid rebound as vaccines became widely available.

SpiceJet reported a net loss of ₹562 crores ($75.5 million) in Q2, an improvement from the ₹729 crores ($98mn) during Q1 but over 400% higher than the same time last year. The carrier also saw a sharp bump in revenues by 23% to ₹1,342 crores ($180.5 million).

Spicejet
Photo: Getty Images

The only bright spot in the results remains the cargo business. SpiceXpress once again increased revenues, with a modest 5% bump in Q2 to ₹497 crores ($66.85mn). While growth has slowed, the business remains the only profitable part of the airline and is part of a broader plan to help SpiceJet reduce its liabilities.

In a statement about the results, CEO Ajay Singh said,

"We have made excellent progress in our recovery and I expect this trend to continue forward in the coming quarters. With the nationwide vaccination drive growing at an unprecedented pace across geographies, there is a significant jump in travel demand and we are very excited about the demand recovery."

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Modest developments

While SpiceJet has seen a marked improvement in revenues, the gains look modest in the face of the competition. Market leader IndiGo saw a net loss of ₹1,457 crores ($196mn) in Q2 but saw its revenues increase by over 80% quarter-on-quarter, an increase in line with the rapid passenger growth.

However, SpiceJet is still struggling to find its footing in the market after the second wave of COVID cases. Its market share now stands at 8.5%, leaving it behind IndiGo, Air India, and Vistara, as it struggled to increase capacity and attract travelers. Given this, SpiceJet's gains have been a lot more modest than once hoped.

SpiceJet 737
SpiceJet could be on the cusp of boosting capacity in the coming months. Photo: Getty Images

However, there might be a way for the airline to find its way back. During its earnings call, Singh announced another timeline for the return of the 737 MAX, with the jet set to begin flying in Q3. According to Mint, he said,

"The return of the 737 MAX comes at the perfect time [Q3] for us with passenger traffic picking-up and the government allowing airlines to operate at full capacity. We look forward to inducting additional capacity in the form of our 737 MAX aircraft that will upswing our operational efficiencies and provide significant cost saving capabilities."

Looking ahead

As passenger traffic approaches pre-COVID levels, SpiceJet could be on a path to a full recovery on the back of the 737 MAX and cargo. However, this remains to be seen, and many challenges are in the way.

What do you think about SpiceJet's results? Let us know in the comments!