Second Covid wave hurts SpiceJet results
Indian low-cost carrier SpiceJet reported a wider loss of $106 million in the first-quarter of its 2021 financial year, as a second wave of COVID-19 hit India.
The company said while it had been ramping up operations, a second wave of COVID-19 in March 2021 hit the country leading to a drop in demand and further restrictions, which SpiceJet said had severely impacted revenues and profits for the quarter from April to June 2021.
The airline reported a pretax loss of INR729 crore ($106 million) for the quarter compared to a loss of INR593 crore ($79 million) during the same period in 2020.
"The impact of COVID-19 has led to significant disruptions and dislocations for individuals and businesses and has had the consequential impact of grounding the passenger airline operations," said Ajay Singh, the Managing Director of SpiceJet. "The company is required to adhere to various regulatory restrictions, which severely impacts its operations and have their own additional financial implications."
Another barrier affecting the company's financial performance has been the grounding of its Boeing 737 MAXs as per the imposed regulations by the Indian Civil Aviation Authority due to technical limitations of the aircraft. Therefore, SpiceJet is negotiating with Boeing to recover the losses incurred due to the grounding of the Boeing 737 MAX.
Cargo operations have almost tripled since 2020, generating revenue of USD 22 million to USD 63.6 million in 2021.
During this quarter, the airline claimed loan funding up to USD 16.1 million under the Emergency Credit Line Guarantee Scheme ('ECLGS') offered by the Indian Government.
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